The Karnataka Authority for Advance Ruling (AAR) observed that Central Police Canteen is not Unit Run Canteen and hence is liable to pay CGST on goods sold to authorized customers.
The applicant is a subsidiary canteen of Central Police Force Canteen System (CPFCS/ CPF Canteen System), which is set up vide letter No.27011/75/2011-R&W dated 18.11.2011, issued by the Resettlement & Welfare Department, Police Division-II, Ministry of Home Affairs, Government of India and thus claims that they are entitled to avail CPF Canteen facilities.
The applicant being a subsidiary canteen formed in terms of permission granted vide letter No.DA-VII/SC-CP/2013 dated 28.11.2013, issued by the Central Office, Central Police Canteen, Ministry of Home Affairs, Government of India. The applicant is engaged in the business of supply of subsidized goods to serving & retired police personnel of the State Police Organisations.
The applicant claimed that they are a recognized Unit Run Canteen and sought to know whether the supply of goods by them to authorized customers is exempted or not. The applicant without mentioning the number of relevant notification, seeks the ruling on applicability of the Notification No. 07/2017-Central Tax (Rate) dated 28.06.2017.
A Two-Member Bench of the Authority comprising Dr MP Ravi Prasad, Member and Kiran Reddy T, Member observed that “In view of the foregoing it is very clear that the notification is applicable only to the Canteen Stores Department under the Ministry of Defence, and not to any other Canteen Stores. In the instant case, the applicant canteen is formed under the orders of Ministry of Home Affairs and thus the notification No.6/2017-Centra1 Tax (Rate) dated 28.06.2017 is not applicable to the applicant and thereby they are not entitled to claim the benefit of the said notification.”
“The applicant is not covered under Unit Run Canteen and thus is not exempted from levy of CGST on goods sold by it to authorized customers” the Authority concluded.
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