This Annual round-up analytically summarizes the key Indirect Tax-Goods and Services Tax rulings of the Authority for Advance Rulings (AAR) and Appellate Authority for Advance Ruling (AAAR) reported at Taxscan.in during 2024.
The Rajasthan Authority for Advance Ruling ( AAR ) has issued a significant ruling on the applicability of Input Tax Credit ( ITC ) claims for Goods Transport Agencies ( GTAs ) on transport vehicles purchased before the new GST mechanism came into effect.
The two-member bench of Mahipal Singh and Mahesh Kumar Gowla acknowledged the change in tax mechanism and its impact on ITC claims. However, they noted that the applicant was a registered person under the GST Act, and the transport vehicle was intended for use in the course or furtherance of their business. The bench ruled that claim of ITC is available on the vehicle by specifying conditions that the ITC amount will be subject to a reduction of 5% per quarter, or part thereof, calculated from the invoice date of the purchase. This reduction reflects the transition from RCM to FCM.
The Authority for Advance Rulings (AAR) in Karnataka ruled that the supply of teachers and lecturers to schools and colleges run by municipalities is exempt from Goods and Services Tax (GST).
The two-member bench of M.P Ravi Prasad and Kiran Reddy. ruled that “the service of supply of teachers/lecturers to schools/colleges run by BBMP, on outsource basis is covered under pure services being provided to a local authority (BBMP) by way of an activity in relation to a function “Promoting educational aspects” entrusted to a Municipality under article 243W of the Constitution of India and hence are exempted in terms of entry number 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.”
The Karnataka Authority for Advance Rulings has held that the Advance Authority cannot give any decision on issues that are not covered under section 97(2) of Central Goods and Service tax ( CGST ) Act, 2017. It was found that the applicant is already registered under GST and the questions on which advance ruling has been sought for are not covered under the issues mentioned under Section 97 (2) of the CGST Act and the application is liable for action in terms of Section 98(2) of the CGST/KGST Act 2017.
AAR bench comprising M.P. Ravi Prasad and Kiran Reddy observed that the authority can’t give any decision on the issues that are not covered under Section 97 (2) of the CGST Act 2017. The applicant is already registered under GST and the questions on which advance ruling has been sought for are not covered under the issues mentioned under Section 97(2). Thus, the instant application is liable for action in terms of Section 98(2) of the CGST/KGST Act 2017. The authority rejected the application filed by the Applicant for advance ruling in terms of Section 98(2) of the CGST Act.
The Karnataka Authority for Advance Rulings held that supply of database service to AllMS is not covered under Goods and Service Tax ( GST ) exemption under Notification. The applicant is seeking the rate of tax/ exemption on the supplies under the Clinical Key subscription product supplied to specific customers ( educational institutions ). It was observed that the customer, with the Clinical Key’ subscription, gets online access to a medical centric database with a search facility and no human intervention is available.
The AAR bench comprising Dr. M.P. Ravi Prasad and Kiran Reddy T observed that the customer, with the Clinical Key’ subscription, gets online access to a medical centric database with a search facility. The website also has a browser facility for navigation of the content that is supplied in electronic form. There is no human intervention from the applicant’s side as the user himself navigates through the contents and access whatever that is available in the subscribed database. The Authority held that the supply of services by the applicant to AllMS is not covered under exemption in terms of Entry No. 69(b)(v) of the Notification No. 9/2017-1T(Rate) dtd 28.6.2017 as amended.
The Karnataka Authority For Advance Ruling ( AAR ) has held that Advance Ruling on completed supply of self-assessed tax is beyond jurisdiction of authority and rejected the same.
The AAR Comprising Dr. M.P. Ravi Prasad and Kiran Reddy T observed that Section 95(a) of the CGST Act 2017, while defining the term ‘advance ruling’, stipulates that an applicant can seek advance ruling on the questions specified under Section 97 (2) of the CGST Act 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant. It was found that the questions, on which the applicant seeks advance ruling, are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant, but in relation to a completed supply on which self-assessed tax is discharged by the applicant.
The AAR held that the application is beyond the jurisdiction and rejected, the same in terms of Section 98(2) of the CGST Act 2017.
The Uttar Pradesh Authority For Advance Ruling ( AAR ) ruled that sleeping bags are classifiable under the category of ‘Mattresses’ ( Chapter Heading 9404 30 90 ) of Goods and Service Tax ( GST ) Tariff and 12% GST is payable.
The AAR comprising Amit Kumar and Harilal Prajapati ruled that “The product “sleeping bag” as described in the application will merit classification under Chapter Heading 9404 30 90 of the GST Tariff and would be chargeable to GST at applicable rate @ 12% (CGST @ 6%, SGST @ 6%) under the said tariff entry, presently read with Notification No. 01/2017-Central Tax (Rate) dt. 28.06.2017 (as amended ) ( Sl. No. 224 of Schedule-Il)”.
The Rajasthan Authority for Advance Ruling ( AAR ) has held that used metal scarps are not second-hand goods and have no benefit under the margin scheme in terms of Rule 32(5) of Central Goods and Service Tax ( CGST ) Rules 2017.
The authority comprising Mahipal Singh and Mahesh Kumar Gowla held that the items to be dealt with by the applicant do not qualify to be Second-Hand Goods and therefore the applicant is not eligible to operate under the Margin Scheme in terms of Rule 32(5) of Central Goods and Service Tax Rules, 2017.
The AAR held that since the items to be dealt with by the applicant do not qualify to be Second-Hand Goods, the applicant is not eligible to operate under the Margin Scheme in terms of Rule 32(5) of Central Goods and Service Tax Rules, 2017 read with corresponding provisions of SGST Rules, 2017.
In a recent case, the Gujarat Authority For Advance Ruling ( AAR ) has held that the Special Economic Zone ( SEZ ) is not required to pay Goods and Service Tax ( GST ) under Reverse Charge Mechanism ( RCM ) for legal services received by Virtue of Notification on Central Tax Rate.
The authority held that the applicant, an SEZ unit, is not required to pay GST under RCM on specified services under notification No. 10/2017-1T(Rate) dated 28.6.2017 as amended from time to time, subject to furnishing a LUT or bond as specified in condition (i) of 1 of notification No. 37/2017-CT
In a recent ruling, the Uttar Pradesh Authority For Advance Ruling ( AAR ) ruled that 15% Goods and Service Tax ( GST ) is applicable only on supervision charge fees when the value of materials and cost of execution of work was borne by the service recipient.
The authority observed that “where the value of materials and cost of execution of work for installation of electric lines are borne by the recipient of service and the applicant charges supervision fees only, the value of materials and cost of installation shall not be included in the value of supply for determination of taxable value under GST and the applicant shall be liable to pay GST only on the supervision charges.” Further held that 15% GST is chargeable on supervision fee as in the second mode the entire work with material is arranged by the customers and installation work is done by the contractors hired by the customers.
The Uttar Pradesh Authority for Advance Ruling ( AAR ) held that the sale of residential units of the project is not a sale of immovable property but a sale of services and GST is leviable. Once, GDA denies the Completion Certificate to the applicant, the Completion Certificate cannot be said to be deemed approved.
Once, GDA denied the Completion Certificate to the applicant. Hence, a Completion Certificate cannot be said to be deemed approved. The ‘first occupation’ cannot be said to be taken either. Thus, the sale of residential units in Phase IV of the project by the applicant is not a sale of immovable property but a sale of services and thus GST is leviable.
The AAR held that the sale of residential units in Phase IV of the project by the applicant is not a sale of immovable property but a sale of services and thus GST is leviable.
The Rajasthan Authority for Advance Ruling ( AAR ) ruled that 18 % Goods and Service Tax ( GST ) is Payable on “Milk food for babies” and “Milk for babies”. It was found that the Principle/dominant item of the applicant is the manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute for mother’s milk for infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090.
The AAR found that the Principle/dominant item of the applicant is manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute to mother’s milk for the infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090. Since, it is established that the final product manufactured by the applicant is classifiable under 19011090, the rate of GST payable by them in term of Notification No.01/2017 (Central Rate) dated 28.06.2017 is 18% GST (9% CGST & 9% SGST/ 18% IGST).
The Gujarat Authority for Advance Ruling ( AAR ) held that the activity of insulating bare M.S. Pipes on a job work basis using PU Foam and PE Film/HDPE jackets attract 18 % Goods and Service Tax ( GST ). The authority held that the activity of insulating bare M.S. Pipes provided by the registered customers on a work basis using PU Foam and PE Film/HDPE jackets would be classifiable under Sr. No. 26 of notification No. 11/2017-CT (Rate) dated 28.6.2017.
It was observed that “for services by way of treatment of processing undertaken by the applicant on physical inputs which are owned by persons other than those registered under the CGST Act, would be classified under 26(iv) of notification no. 1 1/2017-CT(Rate), ibid, under the heading 9988.”
The Gujarat Authority for Advance Ruling ( AAR ) has ruled that Special Economic Zone ( SEZ ) Units are exempted from Goods and Service Tax ( GST ) under the Reverse Charge Mechanism ( RCM ) for Specified Services if they furnish a Letter of Undertaking ( LUT )/Bond.
The CBIC clarified that a unit in SEX or the SEZ developer can procure such services, where they are required to pay GST under reverse charge, without payment of integrated tax provided the actual recipient, i.e. unit in SEZ or SEZ developer, furnishes a Letter of Undertaking in place of a bond as specified in condition no. (i) in para 1 of Notification No. 37/2017 —Central Tax dated 4.10.2017.
The Gujarat Authority of Advance Ruling ( AAR ) has ruled that Goods and Service tax ( GST ) exemption is not available to Zero Liquid Discharge ( ZLD ) treated water and 18% GST is applicable.
The AAR comprising Amit Kumar Mishra and Milind Kavatkar has observed that the water obtained from the CETP, which has further undergone the processes of ultra-filtration and reverse osmosis in the ZLD plant, has a small amount of dissolved minerals and chemicals and is virtually free from all types of toxic materials. The AAR held that the ‘treated water’ obtained after undergoing the process through CETP and the ZLD plant is classifiable under Chapter 2201 and is taxable at the rate of 18% GST.
The Gujarat Authority of Advance Ruling ( AAR ) has ruled that Mix Mukhwas and Roasted Til & Ajwain are a Mixture of Products and liable to pay 5% Goods and Service Tax ( GST ). It was held that the products ‘Mix Mukhwas’ and ‘Roasted Til & Ajwain’ prepared and sold are covered by Tariff Item 12074090 of the Customs Tariff Act, 1975.
The AAR held that the products ‘Mix Mukhwas’ and ‘Roasted Til & Ajwain’ prepared and sold are covered by Tariff Item 12074090 of the Customs Tariff Act, 1975. The products ‘Mix Mukhwas’ and ‘Roasted Til & Ajwain’ prepared and sold are covered by entry no. 70 of Schedule I of notification No. 1/2017-CT(R) dated June 28, 2017 and taxed at the rate of 2.5% CGST, 2.5% SGST, or 5% IGST.
The Authority for Advance Rulings ( AAR ) in Karnataka ruled that the services provided by individual truck owners for transport of raw materials and finished goods, including loading and unloading, are liable to GST and fall under the category of the Goods Transport Agency ( GTA ).
AAR noted that while a consignment note is not explicitly defined under the GST Act or the relevant notification, they relied on the explanation provided under the erstwhile Service Tax Rules, 1994, which define a consignment note as a document issued by a transporter containing details of the consignment, consignor, consignee, place of origin, destination, etc.
The Tamil Nadu Authority for Advance Ruling ( AAR ) ruled that Free on Board ( FOB ) exporters under the Reverse Charge Mechanism ( RCM ) basis wouldn’t be liable for Goods and Services Tax ( GST ) as they are not involved in arranging the freight.
The Authority observed that “in the instant case of exports on a FOB basis, the exporter (applicant) is not at all involved in any way with the ‘export freight’, as the same is to be arranged by the overseas buyer themselves or through his agent. We further find that the exporter is neither the provider nor the recipient of service relating to ‘export freight’. Therefore, the question of payment of GST on an RCM basis on the export freight on the FOB basis of exports by the exporter (M/s. DCW Ltd.) does not arise.”
The Karnataka Authority for Advance Rulings (AAR) has classified a honey bee feed product under HSN code 1702.90, attracting an 18% GST rate.
The AAR concluded that ‘Bee-Prime Feed’ falls under HSN 1702.90 and attracts an 18% GST rate as per entry number 11 of Schedule III to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. The ruling clarifies that the product is not covered under the general description of animal feed but rather as artificial honey due to its composition and use.
The Karnataka Authority for Advance Rulings (AAR) has ruled that an advance ruling on Input Tax Credit (ITC) cannot be sought if proceedings are already pending under any provisions of the GST Act. This ruling aligns with the first proviso of Section 98(2) of the CGST Act 2017.
The bench, comprising M.P Ravi Prasad and Kiran Reddy. T, ruled that the application was not maintainable due to a pending Show Cause Notice (SCN) issued by the department for the same ITC claims. Section 98(2) of the CGST Act, 2017 disallows admitting applications where the raised questions are already under consideration in ongoing proceedings against the applicant under the Act.
The Tamil Nadu Authority of Advance Ruling ( AAR ) has ruled that input tax credit ( ITC ) is not admissible on rotary car parking systems. The authority observed that the Rotary car parking system is an infrastructure with the aim of catering to the need for greater urban density and compactness in cities and to make better use of scarce land.
The AAR bench comprising D. Jayapriya and A. Valli observed that the Rotary car parking system provides additional space to park the vehicles depending upon the number of storeys built or preferred. The constituent parts/ or components of the rotary car parking are observed to be analogous to those of building blocks utilized in the construction of multi-story conventional car parking. Hence, the rotary car parking system is nothing but a civil structure.
The Authority for Advance Rulings (AAR) has ruled that a mobile application connecting service providers with potential customers qualifies as an ‘e-commerce operator’ under Section 9(5) of the Goods and Services Tax Act, 2017 (GST Act). Consequently, the platform is liable to pay GST on notified services booked through their app.
The AAR bench observed that the applicant facilitates the partner or service provider in supplying their service to the end user by making use of the app maintained by them and enabling the user to get door-step service. Hence, the applicant squarely fits into the definition and qualifies to be an electronic commerce operator.
The Authority for Advance Ruling (AAR), Tamil Nadu, ruled that processed frozen shrimps, when packed in individual printed or plain pouches or boxes, fall under the ‘pre-packaged and labelled’ category. This classification has significant implications for exporters, as it brings these products under the ambit of the Goods and Services Tax (GST).
The AAR observed that “both the entries relate to goods other than fresh and chilled, the only distinction being whether the goods are ‘pre-packaged and labelled’, or other than ‘pre-packaged and labelled’. Hence, the point for determination herein is as to whether the supply of specified pre-packaged and labelled frozen shrimp meant for export would fall within the meaning of the definition of ‘pre-packaged and labelled commodity’ under the Legal Metrology Act, 2009, and the rules made thereunder, as defined under explanation (ii) of the respective notifications”.
The Tamil Nadu Authority for Advance Rulings ( AAR ) held that the Goods and Services Tax ( GST ) is not leviable on the sale of goods warehoused in third-party Free Trade Warehousing Zone ( FTWZ ) on an “as is where is” basis to customers who clear the same to a bonded warehouse under the Merchandise Warehouse and Withdrawal for Re-export ( MOOWR ) Scheme.
The AAR observed that “the instant case of the applicant, where the imported goods stored in a third-party FTWZ warehouse, is being moved to the Bonded Warehouse ( MOOWR ) on effecting a sale to an OEM’s MOOWR unit, taxes under GST are not leviable, as the transaction gets covered under clause 8(a) of the Schedule III of the CGST Act, 2017, which reads as “Supply of warehoused goods to any person before clearance for home consumption”.
The Karnataka Authority for Advance Rulings ( AAR ) held that the rate of 18% of Goods and Services Tax ( GST ) is applicable on supply of ‘EDF Thrusters with Battery Pack for Jet Suit’.
The bench of the authority, comprising M.P. Ravi Prasad and Kiran Reddy T, observed that the electric-ducted fan (EDF) thrusters based Jetsuit apparently derives support in the atmosphere by generating thrust against the earth’s surface. Hence, they are not covered in the definition of ‘aircraft’, and the contention of the applicant that the jetsuit is an aircraft and the EDF thrusters with battery packs are part of an aircraft, which is subject to GST at a rate of 2.5%, is not acceptable.
The Rajasthan Appellate Authority For Advance Ruling ( AAAR ) dismissed the appeal as withdrawn. It was found that the question of the classification of goods and services was clarified by a notification issued by the GST Council.
The Appellant vide email dated 07.02.2024 stated that the GST Council had issued clarification and notification in respect of the question on which Advance Ruling was sought by the Appellant. Therefore, they have withdrawn their appeal. In light of the withdrawal of the Appeal by the appellant himself, the AAAR comprises of Mahendra Ranga, Member ( Central Tax ) and Dr. Ravi Kumar Surpur, Member ( State Tax ) dismissed the appeal.
In the case of the Board of Secondary Education Rajasthan, the Rajasthan Appellate Authority for Advance Ruling ( AAAR ) set aside the ruling by the Advance Authority for Rulings ( AAR ) and remanded the matter for fresh consideration. The AAR dismissed the application of Advance Ruling stating that the applicant is not a supplier of goods or services. The case was on the applicability of exemptions under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 regarding services provided to educational institutions, particularly in the context of conducting examinations.
The AAAR Comprising Mahendra Ranga and Dr Ravi Kumar Surpur found that the AAR erred in law by rejecting the application solely on the ground that they are recipients of service and do not fall under the definition of Applicant as can be understood from the High Court of Calcutta Judgement that definition of Applicant is quite broad. The authority set aside the Ruling of AAR, Rajasthan and remanded the matter back to the AAR to decide the application afresh.
The Rajasthan Appellate Authority for Advance Ruling ( AAAR ) directed the Authority for Advance Ruling ( AAR ) to pronounce rulings after considering the contentions of the appellant.
The Advance Ruling was pronounced on 27.09.2021 based on an amendment which was not operational as on the date of pronouncing Ruling. The appellant avers that such a Ruling is not sustainable and deserves to be quashed. The AAAR set aside the Ruling of the AAR, Rajasthan and remanded the matter back to AAR to decide the application de-novo after considering all the contentions of the appellant.
The Gujarat Authority of Advance Ruling (AAR) ruled that Mix Mukhwas and Roasted Til and Ajwain attract Goods and Services Tax (GST) at the rate of 5%.
It was noted that, “The composition of both the products, in respect of which ruling is sought, clearly show that these products, mainly comprise of sesamum seeds i.e. 60% in respect of the first product and 97% in respect of the second product.”
It was thus found that, “the product is classifiable under chapter 12 of the Customs Tariff Heading, specifically CTH 12074090.”
In a recent ruling, the Gujarat Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) can be availed on capital goods in the form of wires/cables electrical equipment etc,630 mm square aluminium corrugated sheath/G cable line for installation of 66 KV feeder bay at the substation of GETCO) used for transmission of electricity from power stations of Distribution Companies (DISCOM) to factory premises.
The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that there is no provision under the Center Goods and service tax ( CGST ) Act, 2017 which bars availment of ITC by the applicant if subsequently the capitalised goods are handed over to Gujarat Energy ‘Transmission Corporation Ltd. (GETCO)/others.
The Uttar Pradesh Authority for Advance Rulings ( AAR ) clarified that GST is applicable only on supervision fees when the materials and installation costs are borne by the recipient. The ruling was made in the case of Uttar Pradesh Power Transmission Corporation Ltd.
The two member bench of the tribunal comprising Harilal Prajapathi ( Member of AAR ) and Amit Kumar (Member of AAR) has observed that value of material and cost of execution work for installation of lines will be included in the value of supply for determination of taxable value under GST where all such cost are borne by the recipient of service and the applicant charge only supervision charges
The Uttar Pradesh Authority for Advance Ruling (AAR), ruled that supply of vouchers is considered taxable as goods, and the value of such supply should be determined in accordance with Section 15 of the Central Goods and Service Tax (CGST) Act, 2017.
The two member benches of the tribunal comprising Harilal Prajapati ( Member of AAR) and Amit Kumar ( Member of AAR) concluded that the supply of vouchers by the applicant are taxable at the rate of 9% CGST and 9% UPGST as per residual entry no. 453 of Third Schedule of Notification No. 01/2017-Central Tax (Rate) dt. 28.06.2017 (and similar notification under the UPGST Act). Further held that Value of supply of vouchers in the present case shall be decided as per sub- sections (1), (2) and (3) of Section 15 of the CGST Act 2017.
The Gujarat Authority for Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is not applicable on the amount recovered for canteen facilities from employees.
The applicant’s case is that they employ more than 250 employees who have been provided with canteen facilities in terms of section 46 of the Factories Act, 1948. The applicant is on record that the canteen facility is being provided to supervised contract employees and third party employees apart from the permanent employees. The tribunal held that the deduction made by the applicant from the employees who are availing food in the factory would not be considered as a ‘supply’ under the provisions of Section 7 of the CGST Act, 2017.
The two member bench of the Gujarat Authority for Advance Ruling ( AAR ) has confirmed that Input Tax Credit ( ITC ) is eligible for Goods and Services Tax ( GST ) on canteen services provided to factory employees.
The tribunal hold that Input Tax Credit will be available to the appellant in respect of food and beverages as canteen facility is obligatorily to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963 as far as provision of canteen service employees working at the factory is concerned. It is further held that the ITC on GST charged by the canteen service provider will be restricted to the extent of cost borne by the appellant only.
The Gujarat Authority of Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) will be available to the appellant in respect of food and beverages as the canteen facility is obligatory to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963.
The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that the applicants employ more than 300 employees who have been provided with canteen facilities in terms of Section 46 of the Factories Act, 1948. It was ruled that input tax credit (ITC) will be available to the applicant on GST charged by the service provider in respect of the canteen facility provided to its employees working in their factory as it was obligatory under the Factories Act, 1948, read with Gujarat Factories Rules, 1963.
The Tamil Nadu Bench of the Authority for Advance Rulings ( AAR ) has ruled that Goods and Services Tax ( GST ) Exemption Notification 04/2019 is not applicable for services of research and development supplied in relation to the ‘Agro-Chemical’ Sector.
The authority stated that Notification No. 04/2019 Integrated Tax, dated September 30, 2019, is specific to the pharmaceutical sector. It does not cover research and development services supplied to the agro-chemical sector under agreements with foreign service recipients. There are no provisions to include the agro-chemical sector within the scope of this notification. The authority bench observed that the notification’s language is clear and unambiguous, applying only to pharmaceutical research and development services
The Karnataka Authority for Advance Rulings (AAR) has ruled that the ride-hailing platform ‘Rapido’ is liable to pay goods and services tax for its cab services, a ruling that potentially adds to the ambiguity over GST applicability on app-based mobility companies operating the subscription model.
The AAR Bench examined Rapido’s operations, noting that the company owns and operates a digital platform facilitating the supply of passenger transportation services. The tribunal observed that Rapido fits the definition of an e-commerce operator as it manages a platform that connects drivers with customers.
The Karnataka Authority for Advance Rulings (AAR) has ruled that “Pushti,” a powdered mixture of cereals, pulses, and sugar, is exempted from GST ( Goods and Services Tax).
The Court observed that the product ‘Pushti’ is a powdered mixture of cereals, pulses, and sugar. The Applicant sought clarification on whether their product can be classified as “pre-packaged and labeled,” thereby subject to taxation under entry No. 59 of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017, further amended by Notification No. 06/2022 Central Tax (Rate) dated 13.07.2022.
The Karnataka Authority for Advance Rulings ( KAAR ) observed the rent received from renting out building to the Department of Social Welfare for running boys hostel for weaker section is exempted from the GST ( Goods and Services Tax ).
The AAR Authority consisting of M P Ravi Prasad ( SGST Member ) and Kiran Reddy T( CGST Member ) considered the submissions and stated that the applicant is providing pure services to the state government related to functions under Article 243G of the Constitution. This falls under Entry No. 3 of Notification 12/2017 Central Tax ( Rate ) dated June 28, 2017, and is therefore not subject to GST.
The Karnataka bench of the Authority for Advance Ruling ( AAR ) has determined that the Retention Bonus, Joining Bonus, and work from home allowance, along with expenses under the Tuition Assistance Program (TAP), are exempted from Goods and Service Tax ( GST ).
The bench noted that the recovery of retention bonuses, joining bonuses, work-from-home allowances, and TAP-related expenses occurs only if employees voluntarily exit before the stipulated duration. The intent of these incentives is to motivate employees to remain with the company.
The Karnataka Authority for Advance Ruling (AAR) determined that rent received from the Department of Social Welfare, Government of Karnataka, is exempt from Goods and Services Tax (GST).
The AAR observed that the service provided by the applicant qualifies for exemption based on two primary conditions. Firstly, the service is purely provided to the State Government. Secondly, the service is directly linked to a function assigned to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.
The Karnataka Advance Ruling Authority ( AAR ) has held that the security services provided to Bruhat Bengaluru Mahanagra Palike ( BBMP ) by a private limited company were not exempted from liability of Goods and Services Tax ( GST ).
The bench consisting of M.P. Ravi Prasad (Additional Commissioner of Commercial Taxes) and Kiran Reddy (Additional Commissioner of Customs & Indirect Taxes) was of the opinion that the security services provided by the applicant to BBMP do not fall under the function entrusted to a panchayat under article 243G of the Constitution or in relation to any function entrusted to a municipality under article 243W of the Constitution of our country.
The Chennai Authority for Advance Ruling held that the supply of Residential Flat Construction service which involving the Transfer of Undivided Share of Land can attract 8% Goods and Services Tax.
According to the Notification dated April 2019, the applicant was given the chance to opt either for the new rate or old rate , without claim of input tax credit or with claim of input tax credit respectively. The applicant believed that his project is an RREP project, so the rate applicable to them will be 8% in case of output liability according to the notification dated 28.06.2017 but which was amended by notification dated 29.03.2019.
The Karnataka Bench of the Authority for Advance Ruling (AAR) has ruled that the professional services for assistance in filing of corporate tax returns provided to Bangalore Water Supply and Sewerage Board (BWSSB) is not an exempt supply as per Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
The authority observed that BWSSB did not qualify as a Local Authority as it was not vested with the control or management of a municipal or local fund. Consequently, BWSSB was neither a State Government nor a Local Authority, failing the first condition for exemption.
The applicant Metropolitan Transport Corporation [Chennai] Limited is a Government of Tamil Nadu carrying out the business of providing passenger transportation services. According to Goods and Services Tax Laws, this primary business activity of the applicant falls under the exempted category.
The division bench of D.Jayapriya and A. Valli observed that the applicant had rented out the premises owned by them to RTO, Chennai as per the lease agreement. As per the agreement there exists no ambiguity regarding the applicability of GST on the differential rent amount due to upward revision of rent.
The Chennai Authority for Advance Ruling (AAR) ruled that Goods and Services Tax (GST) Input Tax Credit (ITC) on Contract Services can be availed by Information Technology (IT) and Information Technology Enabled Services (ITeS) Suppliers for Healthcare Sector.
After all the issues raised by the applicant, the bench find that for the availment of ITC is governed by the provisions of Section 16 & 17 of the CGST Act, 2017 and Section 16 provides for the eligibility and conditions for taking ITC, Section 17 deals with the apportionment of credit and blocked credits
The Tamil Nadu Advance Ruling Authority (AAR), held that the value of ‘Deposit Contribution Works’ (DCW) under self-execution schemes is to be restricted to the establishment and supervision charges and other charges if received from the recipient.
The bench remarked that the execution of DCW (Deposit Contribution Works) does fall within the scope of supply, although it is very dependent on who or which party executes it. In this regard, the distinction between the nature of transactions engaged under DCW and under “DCW – Self-execution mode” is quite important in the context of this case.
The Tamil Nadu Advance Ruling Authority (AAR) in a recent judgment held that the purchase of raw effluent and the supply of treated output could be considered the sale of goods.
The bench, comprising of D. Jayapriya (Additional Commissioner/ Member CGST), and M. Valli (Joint Commissioner/Member (SGST), held that, regarding the suggested method of acquiring raw effluent, handling it independently, and providing output at market rates, it is accurate to classify the output supply as a “sale of goods.”
The Kerala Authority for Advance Ruling ( AAR ) has provided much-needed clarity on the Goods and Services Tax ( GST ) rates applicable to road and bridge construction contracts awarded by the Kerala State Transport Project ( KSTP ). The ruling addresses the uncertainty faced by contractors, including M/s. Sreedhanya Construction Company, regarding the applicable tax rates for such contracts.
The AAR explained that for works contract services provided to KSTP, if the time of supply, as determined in accordance with Section 14, falls before July 18, 2022, the applicable GST rate would be 12%. Conversely, if the time of supply falls on or after July 18, 2022, the applicable GST rate would be 18%. This ruling provides essential guidance for contractors working with KSTP and other similar government projects, ensuring compliance with the correct GST rates.
The Kerala Authority for Advance Rulings ( AAR ) has clarified that the differential dealer margin provided by petroleum companies to their retail dealers constitutes a taxable supply of service under the Goods and Services Tax ( GST ) regime, taxable at the rate of 18%.
The AAR noted that this margin is provided when sales volumes decrease below a mutually agreed level to ensure the dealership remains operational. Thus, the margin falls under clause (e) of Sl. No. 5 of Schedule II of the CGST Act and is taxable under GST. The AAR further clarified that Section 15(3) of the CGST Act, which deals with the value of taxable supply and discounts, is not applicable in this case. The taxable supply in question is the service of refraining from an act, not the sale of petrol or diesel. As per the GST law, the service of “agreeing to refrain from doing an act” is classified under Heading 9997 and is taxable at 18% GST (CGST 9% and KSGST 9%).
The Tamil Nadu Authority for Advance Ruling ( AAR ) has clarified that health insurance services provided by United India Insurance Company Limited to the Tamil Nadu State Government ( TNSG ) are exempt from Goods and Services Tax ( GST ) under S.No.40 of Notification No.12/2017 Central Tax (Rate).
Regarding reinsurance, the AAR ruled that services provided by foreign reinsurers are exempt from GST. The tax liability under the Reverse Charge Mechanism (RCM) is not applicable in this case for foreign reinsurers as the services are deemed exempt. The ruling confirms that reinsurance services received from foreign reinsurers are exempt from GST, thereby negating the need for the applicant to discharge GST under RCM for these services.
In a recent Judgement, the Karnataka bench of the Authority for Advance Ruling ( AAR) refused to decide on the input eligibility for renting commercial property, stating that the matter is sub judice and pending before the Supreme Court.
The Authority for Advance Rulings (AAR) has reviewed the submissions made by the Applicant and considered the relevant facts, arguments, and representations presented during the hearing. The AAR bench, consisting of M.P. Ravi Prasad and T. Kiran Reddy, noted that the issues raised in this application are identical to those addressed in the audit report. Consequently, the first provision to Section 98(2) of the CGST Act, 2017, applies to the current case, rendering it inadmissible.
The Maharashtra Authority for Advance Ruling ( AAR ) has ruled that sale of advertisement space on print media for Health and Education to municipal corporations are exempt from Goods and Services Tax ( GST ).
The Authority bench of Ajaykumar V Bonde and Priya Jadhav noted that the words “any activity in relation to any function” used in entry at Sr. no 3 are very broad and shall not be confused with the words “directly in relation to”, which are used for direct and proximate relationship. It was observed that, “it is mandatory to issue advertisements for recruitment, and therefore publication of such advertisements is ultimately mandatory for recruitment of doctors for constitutional functions, who in turn are necessary for providing health services. Government has used words “any activity’ in the notification, which also means that “the activity of Selling of space for advertisement in print media’ is also covered in the entry.
The Kerala Authority for Advance Ruling ( AAR ) has ruled that counter sale of Pani Puri, Bhel Puri, Masala Puri and other chaat items like Masala Chat, Sev Puri, Samosa Chaat, Vada Pav, Pav Bhaji and Punjabi Lassi attracts Goods and Services Tax ( GST ) at 5%, when sold without a brand name.
The tribunal bench of Gayathri PG and Abdul Latheef K thus ruled that, “The sales as mentioned above falls under “Services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food” falling under HSN 996331.”
The Authority for Advance Rulings ( AAR ), Maharashtra has clarified the tax exemption status for hostel accommodations provided by the society under Notification 12/2017- Central Tax ( Rate ) dated June 28, 2017
The authority asserted that, based on the duration of stay the supply of services can be divided into three broad categories: Duration of stay of 10 months. Duration of stay of one to two months during the vacation periods to new Students. Duration of stay of one to two months during the vacation periods for old students who have already stayed in a hostel for a duration of 10 months. Therefore, the question raised by the applicant was trifurcated in to 3 parts depending on the aforesaid duration of stay and its combinations and such 3 reframed questions were answered by the tribunal.
In the case of the Board of Secondary Education Rajasthan, the Rajasthan Appellate Authority for Advance Ruling ( AAAR ) set aside the ruling by the Advance Authority for Rulings ( AAR ) and remanded the matter for fresh consideration. The AAR dismissed the application of Advance Ruling stating that the applicant is not a supplier of goods or services.
The AAR found that the Appellant is the recipient of various services. It was held that Section 95 of the CGST Act, 2017 allows the authority only to decide on matters or on questions about the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. It was found that the Appellant is not a supplier and are recipient of services supplied by various suppliers.
The Rajasthan Appellate Authority for Advance Ruling ( AAAR ) directed the Authority for Advance Ruling ( AAR ) to pronounce rulings after considering the contentions of the appellant.
The AAAR comprising of Sh. Mahendra Ranga, Member (Central Tax) and Dr. Ravi Kumar Surpur, Member (State Tax) observed that though the said amendment was retrospective, however, it was not passed by all state assemblies as well as it was not operational till the date when the Ruling was pronounced.
Recently, the Andhra Pradhesh bench of the Appellate Authority for Advance Ruling (AAAR) held that 28% GST is applicable on car seat covers if they serve the function of an essential and integral part of the seat’s assembly.
After examining the facts of the appeal, the AAAR bench of Mr Sanjay Pant and Mr Girija Shankar also held that the seat covers were indeed essential components of the car seats, permanently attached and integral to the seat assembly. The distinction between “parts” and “accessories” was examined, and it was concluded that these seat covers, while enhancing functionality and protection, remain an integral part of the seat assembly rather than mere accessories as they were designed in line with the car’s safety guidelines.
In a recent case, the Appellate Authority for Advance Ruling ( AAAR ) of Andhra Pradhesh held that only products containing Nitrogen, Phosphorus or Potassium should be classified as fertilizer for GST classification purposes.
After hearing the arguments, the bench of Mr Sanjay Pant and Mr Girija Shankar observed that the appellant’s products didn’t contain even one of the essential fertilizer elements as given under GST law, ie, nitrogen, phosphorus or potassium, to qualify them as fertilizers. In light of this key observation the bench concluded that they are in agreement with the AAR’s order and hence, upheld the same.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
