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.
The Rajasthan Bench of Authority for Advance Ruling (AAR) ruled that the supply of medicines and other procedures during the treatment of inpatients admitted to hospitals is considered a composite supply where principle supply is health care service.
The Bench of Umesh Kumar Garb (Member of Central Tax ) and Mahesh Kumar Gowla (Member of State Tax) observed that according to the circular No.32/06/2018-GST, (F.No.354/ 17/2018 TRU Dt.12.02.2018) issued based on the approval of 25th GST Council Meeting, it was clarified that food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. In light of the above circular, the supply of medicines and other procedures during treatment of inpatients admitted to hospitals amounted to composite supply and eligible for exemption under category “health care services”. The nature of various services in a bundle of services will help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and other services combined with such service are incidental or ancillary services which help in better utility of main service then the various elements of the service are said to be naturally bundled in the ordinary course of business. The bench further observed that the various AAR passed ruling that the supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of the composite supply of health care treatment and hence not separately taxable.
The Uttar Pradesh Authority for Advance Ruling (AAR) has held that mixing scent would change the character of raw unmanufactured tobacco to manufactured tobacco.
The Authority of Rajendra Kumar [(Additional Commissioner, Member (Central Tax)] and Harilal Prajapati [(Joint Commissioner, Member (State Tax)] referring to the Customs Tariff Classification in respect of chapter 2401 observed that in applicant’s case mixing of tobacco dust with scent ,(mixture of various perfumes and not jarda scent) was a cumulative process of manufacturing and resulted in different and irreversible goods i.e. manufactured chewing tobacco and classifiable under the specific heading under CTH 24039910. The authority therefore held that the processing of unmanufactured tobacco dust by mixing the scent (mixture of various perfumes and not jarda scent) would change the character of unmanufactured tobacco to manufactured tobacco.
he Uttar Pradesh Authority for Advance Ruling (AAR) has rejected the application as the advance ruling application was not filed by the supplier.
The Authority of Rajendra Kumar (Member (Central Tax)) and Harilal Prajapati (Member (State Tax)) observed that, applicant Uttar Pradesh Metro Rail Corporation Limited was receiver of the Goods/Services provided by the KESCO. In light of point (a) provided under Section 95 of CGST Act 2017, only suppliers of the services could file Application for Advance Ruling. In this case the supplier of service was KESCO. Accordingly, the authority held that ruling could not be given as the applicant had not fallen under the definition of Advance Ruling.
In a recent decision the New Delhi Bench of the Customs Authority for Advance Ruling ( AAR), ruled that the activity of bringing goods from a Unit or Developer in Special Economic Zone (SEZ)/Free Trade Warehousing Zone (FTWZ) to Domestic Tariff Area (DTA) is not covered under the definition of the term, import under the Special Economic Zones (SEZ) Act, 2005, therefore such transfer from Special Economic Zone (SEZ) to Domestic Tariff Area (DTA) cannot be termed as re-import.
A Single Member Bench comprising Anamika Singh, Secretary observed that “The activity of bringing goods from a Unit or Developer in SEZ to DTA is not covered under the definition of the term, import under the SEZ Act, 2005, therefore such transfer from SEZ to DTA cannot be termed as ‘re-import’. When the goods are being warehoused in FTWZ, these are not procured by a Unit or Developer, therefore when transfer of goods from DTA to FTWZ or FTWZ to DTA is neither covered under the term ‘procure’ nor ‘import’, therefore such transfer/supply of goods cannot be treated as ‘reimport’ for application of procedures and conditions as applicable in the case of normal re-import of goods from outside India.”
The Telangana Authority for Advance Ruling (AAR), ruled that the supply of goods and services through separate agreements cannot be termed as composite supply.
A Two-Member Bench of the Authority comprising S.V. Kasi Visweswara Rao, Additional Commissioner (State Tax) and Sahil Inamdar, (I.R.S.) Additional Commissioner (Central Tax) held that “The supply undertaken under the first contact terminates with making goods available ex-works and loading them on to the mode of transport. The moment the Applicant raises tax invoice for the supply of goods and endorse the despatch documents, the title of the goods passes on to M/s SCCL.” The Bench further held that “The supply under the second contact commences with service of transportation of the said goods supplied under first contract. Since the transfer of property in the goods supplied under first contract is not taking place during the execution of the Works Contract under second contract, the value thereof cannot be included in the Works Contract.” The Bench concluded that mere fact of different tasks, i.e. two contracts for which separate invoices were issued by him to his recipient, have been entrusted to the applicant through a single contract agreement would not make it a ‘composite supply’ in terms of Section 2(30) of the Central Goods and Services Act, 2017.
The Telangana Authority for Advance Ruling (AAR) has held that the Input Tax Credit (ITC) is applicable on purchase of vehicles to modify for the purpose of ambulance services and supply.
The authority of S.V. Kasi Visweswara Rao, Additional Commissioner (State Tax), and Sahil Inamdar, Additional Commissioner (Central Tax), had observed that ITC for vehicle purchases, intended for modification into ambulances at a workshop in Hyderabad, Telangana State, and subsequent supply to the Government of Tripura, is permissible if the applicant fulfills the conditions outlined in Section 16 of the Central Goods and Services Tax /ITGST Act 2017. According to Section 17(5)(a) of the CGST/TGST Act 2017, the input tax credit (ITC) can be claimed on the purchase of vehicles that are intended to be further supplied as motor vehicles. This provision considers the ITC as not blocked credit since the definition of ‘supply’ includes various transactions such as sale, transfer, barter, exchange, renting, disposal, or leasing of such vehicles.
The Telangana State Authority for Advance Ruling (TSAAR) ruled that the advance ruling under section 104(1) of the Central Goods and Service Tax Act, 2017 (CGST) was void ab inition on the ground of suppression of material facts by the applicant.
The two-member bench comprising S.V. Kasi VisweswaraRao (Additional Commissioner of State Tax) and Sahil Inamdar (Additional Commissioner of Central Tax) ruled that the taxpayer had not brought the issue to the notice of the Authority for Advance Ruling at any stage of the Advance Ruling proceedings including at the time of the personal hearing. Additionally, it was ruled that the applicant had obtained the Advance Ruling by suppressing the facts and hence the orderissued was liable to be declared as void ab initio under theSection 104(1) of the CGST Act.
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