AAR Weekly Round-Up

This round-up analytically summarises the key stories related to the Goods and Service Tax Authority for Advance Ruling (AAR) reported at Taxscan.in during May 27 to June 9, 2023.

No Service Tax Exemption on e-procurement Transaction Fee Collected on Behalf of Telangana Govt: AAR M/s.TELANGANA STATE TECHNOLOGY SERVICES LIMITED CITATION:   2023 TAXSCAN (AAR) 248

The Telangana State Authority for Advance Ruling (AAR) has held that Service Tax exemption is not allowable on e-procurement transaction fees collected on behalf of the Telangana government

A two-member bench comprising Sri B. Raghu Kiran, IRS, Additional Commissioner (Central Tax) and Sri S.V. Kasi Visweswar Rao, Additional Commissioner (State Tax) held that the services provided by the applicant to the Government are not exempt under this Notification. It was further held that the services provided by the applicant on behalf of the Government to business entities are covered by the exception to the above entry, therefore such services also are not exempt.

GST Payable on Monthly Rental, Night Charges, Fuel must be on Mileage Basis while  Availing of Motor Vehicle Rental Services: AAR M/S Uttarakhand Public Financial Management Project CITATION:   2023 TAXSCAN (AAR) 249

The Uttarakhand Authority of Advance Ruling (AAR) has held that GST is payable on monthly rental, night charges, and fuel on a mileage basis when availing of motor vehicle rental services.
A Coram comprising of Shri Anurag Mishra (Member) and Shri Rameshvar Meena (Member) has observed that without fuel the motor vehicle does not operate (run) and without running i.e. moving from one place to another, the act of motor vehicle hire services does not happen. Motor vehicle hire services have the integral component of running/ operating the vehicle from one place to another for transportation. The AAR held that the service provider has to charge GST on the whole amount of the bill which in the instant case is monthly rental plus night charges and fuel on a mileage basis.

ITC Claim Eligible on WCS taken for Structure on which Machineries are Fixed to Earth by Foundation and Services taken for Setting Up Plant: AAR M/S Colourband Dyestuff P Ltd CITATION:   2023 TAXSCAN (AAR) 250

The Gujarat Authority for Advance Ruling (AAR) recently ruled that the Input Tax Credit (ITC) Claim on Works Contract Service taken for Structure on which machineries are fixed to earth by foundation and services taken up for setting up plant are eligible claims.
It was noted that ITC is not available in respect of works contract services when supplied för construction of an immovable property. Further, it was observed that ITC is not available goods, services or both received for construction of an immovable property even when used in the course or furtherance of business. However, the sub-clauses specifically exclude in both the cases, plant and machinery. The second explanation which defines plant and Machinery [for the purposes of chapter V and VII to mean apparatus, equipment and machinery fixed to earth by foundation and structural support & explicitly includes such foundation and structural supports with exclusion of land, building & other civil structures, the advance ruling authority bench further noted. The Authority Bench of CGST Member Amit Kuamar Mishra and CGST Member Milind Kavarkar thus ruled that, WCS taken for structure on which machineries are fixed to earth by foundation and services taken for setting up plant i.e. MS steel structure is eligible subject to finding recorded in the Ruling.

Tours & Travel providers can charge GST on Monthly Rent, Night Charges and Fuel on Mileage basis: AAR M/S Uttarakhand Public Financial CITATION:   2023 TAXSCAN (AAR) 251

The Uttrakhand bench of Authority for Advance Ruling (AAR) ruled that the service providers of tours and travels should charge Goods and Services Tax (GST) on the whole amount of the bill including monthly rent, night charges and fuel used on the motor vehicle on mileage basis.

The bench observed that it has been specifically mandated that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier. Furthermore, the value of supply also includes any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both The AAR added that the provisions of the Section 15 of the Central Goods and Services Tax are very clear and in unambiguous terms it has been mandated that any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both.

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