Complete Case Digest on Tamil Nadu Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) -Part 2

An advance ruling helps the applicant in planning his activities which are liable for payment of GST, well in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as concerned Government authorities. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. A legally constituted body called Authority for Advance Ruling (AAR) can give a binding ruling to an applicant who is a registered taxable person or is desirous to be registered.

Any advance tax ruling is a written interpretation of tax laws. It is issued by tax authorities to corporations and individuals who request for clarification of certain tax matters. An advance ruling is often requested when the taxpayer is confused and uncertain about certain provisions. Advance tax ruling is applied for: before starting the proposed activity.

For example, under income tax, advance ruling is available in international taxation. This is to help non-residents ascertain the income-tax liability, plan their income-tax in advance and avoid long drawn and costly legal disputes. As per GST, the advance ruling is a written decision given by the tax authorities to an applicant on questions relating to the supply of goods/services.

The broad objectives for setting up a mechanism of Advance Ruling

• Provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant
• Attract Foreign Direct Investment (FDI) by ensuring certainty in taxation aspects of transactions
• Reduce litigation
• Pronounce ruling expeditiously in a transparent and inexpensive manner

The Authority for Advance Ruling & the Appellate Authority for Advance Ruling are established under the provisions of the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act. They shall also be regarded to be the established authorities for Advance Ruling under the CGST Act, 2017.Since the bodies are established under the respective State/Union Territory Act, their rulings shall not be binding in other states and union territories.

An advance tax ruling is a technique that multinational corporations and individual taxpayers can use to clarify and confirm certain taxing arrangements. Tax authorities provide written interpretations of tax rules to firms and individuals that want clarification of taxation arrangements.An advance ruling assists the applicant in arranging his actions that are subject to GST payment in advance. It also provides clarity in determining tax liability because the judgement issued by the Authority for Advance Ruling is binding on both the applicant and the government.

Now let’s analyse the judicial interpretations given by the Tamil Nadu Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) in various cases with reference to the stories published in Taxscan.in.

In Re: M/s. ARUN COOLING HOME CITATION: 2021 TAXSCAN (AAR) 346

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Tamarind inner pulp without shell and seeds is not exempted from GST as it is not an agricultural product. The applicant, Arun Cooling has sought the advanced ruling on the issue whether the service of cold storage of tamarind inner pulp without shell and seeds are exempted under the purview of the definition of Agricultural produce vide Notification No. 11/2017- C.T.(Rate) and 12/2017- C.T.(Rate) both dated June 28, 2017.

The coram of Kurinji Selvan and B. Sethilvelavan ruled that the product stored is processed by drying the same in the sun and then by beating with wooden sticks to remove the pod and hammered to deseed and destring for extraction of the endocarp/pulp of the Tamarind. This process is not done at farm level It is done as a Cottage Industry as furnished in the affidavits of the Traders and the Oath of allegiance of the Farmers to whom the storage services are extended by the applicant.

In Re: M/s Kalyan Jewellers India Limited CITATION: 2021 TAXSCAN (AAAR) 103

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that time of supply of the gift vouchers / gift cards by the applicant to the customers shall be the date of issue of such vouchers and the applicable rate of tax is applicable to that of the goods. The appellant has sought the advance ruling on the issue whether gift vouchers are goods or services, its time of supply and applicable rate of tax.

The coram of M.A. Siddiqui and G.V. Krishna Rao modified the order passed by the AAR, Tamil Nadu to the extent that vouchers are neither good nor service and the Central Goods and Services Tax Act, 2017 , recognized it as an instrument of consideration (non-monetary form) for future supply. Further, Held that, Goods and Services Tax will be levied at the time of issue of the voucher and not at the time of actual availing of service or time of redeeming the voucher as the supply is deemed to have been made at the time of issue of voucher itself.

In Re: M/s. SHV Energy Private Limited CITATION: 2021 TAXSCAN (AAR) 347

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Input Tax Credit (ITC) is not available on GST paid on laying of transfer pipeline, foundation and structural support for pipeline. The applicant has sought the advance ruling on the issue whether the applicant is eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline for transporting Propane/Butane from Jetty to the Terminal.
The coram of Kurinji Selvan and B. Sethilvelavan ruled that the applicant is not eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline which is intended for unloading Propane/Butane from the Vessel/Jetty to the Terminal.

In Re: M/s. TAMILNADU WATER SUPPLY AND DRAINAGE BOARD CITATION: 2021 TAXSCAN (AAR) 348

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Service of Geophysical survey investigation is exempted from GST. The applicant has sought the advance ruling on the issue of applicability of the Notification issued under the provisions of the CGST Act,2017 in respect of Rendering “Pure Services” (testing of materials for quality) by TWAD Board which is the Governmental Authority relating to water supply and sewerage schemes to urban and rural beneficiaries which are covered under Twelfth Schedule of Article 243 W of the Constitution.

The coram of Kurinji Selvan and B. Sethilvelavan ruled that the services provided by the applicant, namely, Quality material testing works are not exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/2017- Central Tax (Rate) dated June 28, 2017, as amended. “The service of Geophysical survey investigation is exempted from Goods and Service Tax terms of entry no.3 of the Notification 12/2017- Central Tax (Rate) dated 28.06.2017 subject to conditions,” the AAR ruled.

In Re: M/s. Erode Infrastructures Private Limited CITATION: 2021 TAXSCAN (AAAR) 127

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that the recipient of supply in question cannot seek GST advance ruling. The appellant sought the advance ruling on the issue whether upfront lease amount paid to M/s. RLDA for the development of Multi-functional complex (Operational building) at Erode railway Junction for Long term lease for 45 years is exempt under GST.

The coram of M.A.Siddiqui and G.V.Krishna while affirming the decision of the AAR held that a supplier in the capacity of a recipient of his inward supplies only and not vice versa is only eligible to seek an advance ruling and not a mere recipient of goods or services in question even when he may otherwise be a supplier of his own goods or services.

In Re: M/s. Kalis Sparkling Water Private Limited CITATION: 2021 TAXSCAN (AAAR) 128

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) while affirming the order of the original authority held that 28% GST is applicable on ‘K juice Grape’. The appellant, M/s. Kalis Sparkling Water Private Ltd. has sought the ruling in respect of rate of tax and HSN Code for fruit beverages or drinks namely K juice Grape.

The coram of M.A.Siddiqui and G.V.Krishna Rao while upholding the AAR’s ruling held that it is seen that Pre-GST Tax incidence on the product was 40% whereas, in the GST regime, it was proposed to be taxed at 28%, which was agreed by the GST Council.

In Re: M/s. Chennai Metro Rail Ltd CITATION: 2021 TAXSCAN (AAAR) 129

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) while affirming the AAR’s ruling held that 18% GST on Leasing of the pathway to a person to their Dwelling Unit. The applicant has sought the authority to clarify whether the amount of Rs.30,00,000 received for the purpose of granting right to access to the pathway leading to the dwelling unit is exempted from levy of GST as per the notification treating the agreement as one for leasing out a “dwelling unit”. The applicant sought the advance ruling on the issue whether leasing of a pathway to a person to her/his dwelling unit by CMRL is taxable under GST.
The coram of M.A.Siddiqui and G.V.Krishna Rao held that in the instant case, it is not a lease of the pathway but only rights are granted to the land owner by the appellant for the shared access. It is seen that the grant of access to the pathway is a right given by them to the landowner. This activity of agreeing to grant rights for shared access of the pathway is an “act of agreeing to tolerate an act” and is classifiable under SAC 999794 under “other miscellaneous services/Agreeing to tolerate an act’ and is taxable CGST and 9% SGST as per Sl.No.35 of Notification 11/2017 CT(Rate) dated 28.06.2017 as rightly held by the Lower Authority.

In Re: M/s SI Air Springs Private Limited CITATION: 2021 TAXSCAN (AAR) 342

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 28% GST is payable on Motor Car Air Springs (shock absorber). The applicant has sought the advance ruling on the issue whether “Air Springs” manufactured and supplied by them will be correctly classifiable under Tariff heading 40169990 as opposed to Tariff heading 8708 9900 and attract GST at the rate of 18%.

The coram of ThiruKurinjiSelvaan and Senthilvelavan B. found that the product as a whole is not an article of vulcanized rubber other than hard rubber and not classifiable under Customs Tariff entry at 40169990. Customs heading entry at 87088000 specifically covers Suspension systems and parts thereof of Motor Vehicles classifiable under CTH 8701 to 8705 and the functional utility of the ‘Air Springs being extending suspension or acting as shock absorber designed specifically for Motor Vehicles, the said entry is to be preferred to the residual entry of CTH 8708 9900.

In Re: M/s. New Tirupur Area Development Corporation Limited CITATION: 2021 TAXSCAN (AAR) 349

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 18% GST is applicable on Cheque Bouncing Charges, Interest on receivable on delayed payments, Connection/ Reconnection/ Disconnection/ Charges. The applicant has sought the advance ruling on the issue Whether GST is applicable on Sale of water, Sewage treatment charges and Consultancy Services such Detailed Project Report (DPR), Project Management Consultancy (PMC) and any other infrastructure related consultancy to TCMC / GoTN. The other issue raised was whether GST is applicable on the incidental activities such as Interest on receivable on delayed payments, Disconnection Charges, Reconnection charges, and Permanent disconnection charges and Cheque Bouncing charges.
The coram of Thiru Kurinji Selvaan and Senthilvelavan B. ruled that the activity of Sewage offtake and treatment extended to Tirupur Municipal Corporation as per the CA is exempt under SI.No.3 of Notification No.12/2017- C.T.(Rate) dated 28.06.2017. “The Consultancy Services rendered by the applicant to Tirupur City Municipal Corporation in respect of the Project- Construction Management and Supervision Consulting Service to assist Project ULBs- Tirupur City Municipal Corporation exempt under SI.No.3 of Notification No. 12/2017- C.T.(Rate) dated 28.06.2017,” the AAR ruled.

In Re: M/s Macro Media Digital Imaging Private Limited CITATION: 2021 TAXSCAN (AAAR) 118

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) while upholding the AAR’s ruling held that 12% GST applicable on Printing of content on the PVC materialS, supply of printed trade advertising material. The applicant has sought Advance Ruling on various issues that whether the transaction of printing of content provided by the customer, on polyvinyl chloride banners and supply of such printed trade advertisement material is the supply of goods. The other issue raised by the applicant was that what is the classification of such trade advertisement material if the transaction is a supply of goods.

While upholding the AAR’s ruling, the coram of M.A.Siddique and G.V.Krishna Rao observed that the activity of Printing of the content is the principal supply during which the property held by the appellant in the media of such print gets transferred to their client incidentally. The AAAR disagreed with the contention of the appellant that the supply of Trade advertisement material is the principal supply and therefore, even if the supply is considered as a composite supply, the Principal supply’ is ‘supply of goods, i.e., Trade advertising material and did not find any reason to deviate from the findings of the Lower Authority in this context.

In Re:M/s S.A Safiullah and Co CITATION: 2021 TAXSCAN (AAR) 341

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) while setting aside the AAR’s ruling held that only 5% GST on “Nizam Pakku” betel nut. The issue raised in this case was whether the ‘Nizam Pakku’ bought and sold by the Applicant, the manufacturing process of which has been explained by them is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5 % CGST as per Sl.No.28 of Schedule I of Notification 1/2017 Central Taxes (Rate) Dated June 28, 2017, and equal rate of SGST.

The Coram consisting of M.A.Siddiqui and G.V. Krishna Rao found that from the Commercial Invoice and the related Shipping Bill for Export, the product is described as ‘Nizam BetelNut (Arecanut)’. Thus, it is seen that the product of the appellant is known as Betel nut (Areca nut) and assessed accordingly by the Customs. After considering the appellant’s claim that the terms ‘betel nut’ and ‘areca nut’ are the same and used interchangeably, the Appellate Authority ruled that the applicable GST rate for the product is 5% only and set aside the AAR’s order imposing 12% of GST.

In Re: M/s Shapoorji Pallonji and Company Private Limited CITATION: 2020 TAXSCAN (AAAR) 127

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that the issue of eligibility of Transitional Credit not covered under the purview of the Advance Ruling. The appellant, Shapoorji Pallonji and Company Private Limited sought the advance ruling on the issue of whether the Transitional Provision under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applied for the remaining installments of “Mobilization Advance’, which transitioned into the GST regime and to be adjusted/ deducted by them post the implementation of GST (i.e. Post-July 1, 2017)

The Coram consisting of M.A.Siddique and G.V. Krishna Rao ruled that with regard to the Mobilization Advance transitioned into GST on which no Service Tax is paid as per Chapter V of Finance Act 1994, the issue is not answered and is deemed to be that no ruling is issued under Section 101 3 of the CGST TNGST Act 2017 because of the difference of opinion between both the Members. “On the issue of eligibility of Transitional Credit, we hold that the same is not under the purview of the Advance Ruling,” the AAAR said.

In Re: M/s Vallalar Borewells CITATION: 2020 TAXSCAN (AAR) 192

The Tamil Nadu Authority of Advance Ruling (AAR) held that the drilling of borewells for supply of water in agricultural land is not ‘Support Service for agriculture’. The applicant sought advance ruling on the issue whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce.

The coram consisting of Kurinji Selvan and B. Senthilvelavan ruled that Water-well drilling services are specifically covered under 995434 and the said category includes all Water-well drilling services without any exceptions. Therefore, it is evident that the drilling of borewells without exceptions (even in the agricultural land) is a construction service involving drilling water wells and not a support service for agriculture.

In Re: M/s Thirumalai Chemicals Limited CITATION: 2020 TAXSCAN (AAR) 191

The Tamil Nadu Authority of Advance Ruling (AAR) carved out the method for arriving at value in respect of transfer to branches located outside the state. The applicant has preferred an application seeking advance ruling on the questions in respect of the value to be adopted in respect of transfer to branches located outside the state and whether the value of such supplies can be determined in terms of the second provision to rule 28 in respect of supplies made to distinct units in accordance with clause (4) & (5) of section 25 of the CGST rules, 2017.

The coram consisting of Kurinji Selvan and B. Senthilvelavan ruled that the applicant can adopt any one of the three methods provided under Rule 28 of the CGST/ TNGST Rules 2017 read with Section 15 of the CGST/TNGST Act 2017 to arrive at the value in respect of supply to distinct persons. Firstly, on the basis of open Market Value as is presently being adopted by them. Secondly, 90% of the ultimate sale value was raised by the distinct persons to the un-related ultimate customers based on the Purchase Orders in cases of ‘as such’ supplies. Lastly, the distinct persons being eligible for full Input Tax credit of Taxes paid by the applicant, the ‘Invoice value’ is the deemed ‘Open Market Value’.

In Re: M/s Aravind Drillers CITATION: 2020 TAXSCAN (AAR) 190

The Tamil Nadu Authority of Advance Ruling (AAR) held that letting out of compressors for pumping of water from borewells to agricultural fields is not ‘Support Service for agriculture. The applicant has sought the advance ruling whether the following supply of services provided by the applicant are in relation to agricultural operations directly in connection with raising of agricultural produce namely, drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing and letting out of compressors for pumping of water from the borewells to the agricultural fields.
The coram consisting of Kurinji Selvan and B. Senthilvelavan ruled that drilling of Borewells for supply of water in agricultural land is not ‘Support Service for agriculture classifiable under ‘SAC 9986’. The AAR further ruled that letting out of compressors for pumping of water from the borewells to the agricultural field is not ‘Support Service for agriculture classifiable under `SAC 9986’. Therefore, the AAR held that the two activities of the applicant are not ‘Support service for agriculture’ classifiable under SAC 9986 and therefore the exemption at SI.No.54 of Notification No.12/2017-C.T.(Rate) is not applicable to the tivities of the applicant.

In Re: M/s Sumeet Facilities Limited CITATION: 2020 TAXSCAN (AAR) 182

The Authority of Advance Ruling (AAR), Tamil Nadu ruled that the waste collection, segregation, treatment, transportation and disposal services under the Service Agreements not exempted from GST. The applicant sought the advance ruling on the issue in respect of the Classification·of services and whether the activity of waste collection, segregation, treatment, transportation and disposal services carried out by the Applicant under the Service Agreements entered with both concessionaires is exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/ 2017- Central Tax (rate) dated June 28, 2017.

The coram consisting of KurinjiSelvaan and B. Senthilvelavan ruled that the supply of services by the applicant relating to waste collection, segregation, treatment, transportation and disposal services under the Service Agreements entered with both concessionaires are classified under SAC 9994 in terms of Notification No. 11/ 2017 C.T. (Rate) dated June 28, 2017.

In Re: M/s Shri Abdul Razak Safiullah CITATION: 2020 TAXSCAN (AAR) 180

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Goods and Service Tax (GST) at the rate of 12% is applicable on ‘Nizam Pakku’. The issue raised in this case was whether the ‘Nizam Pakku’ bought and sold by the Applicant, the manufacturing process of which has been explained by them, is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5 % CGST as per Sl.No.28 of Schedule I of Notification 1/2017 Central Taxes (Rate) Dated June 28, 2017 and equal rate of SGST.

The Authority consisting of Kurinjee Selvan and B. Senthilvelavan ruled that “Nizam Pakku” traded by the applicant merits classification under Chapter 0802 80 90 of the Customs Tariff and attracts 6 % CGST as per SI.No. 15 of Schedule II under Notification 1/2017-Central Tax (Rate) dated June 28, 2017 and 6% SGST under Notification No. II(2)/CTR/532(d-4)/2017 vide). G.O.(Ms) No: 62 dated June 29, 2017 as amended.

In Re: M/s Chennai Metro Rail Limited CITATION: 2020 TAXSCAN (AAR) 179

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 18% GST on leasing of pathways to a person to their dwelling unit. The applicant sought the advance ruling on the issue whether leasing of a pathway to a person to her/his dwelling unit by CMRL is taxable under GST.
The two-member bench of Manasa Gangotri Kata and KulinjeeSelvaan ruled that the act of agreeing to grant easement rights of the pathway by the applicant to Dr.K.Prema by way of shared access as per the MOU dt 21-08-2019 is classifiable under SAC 999794 and taxable under GST at 9% CGST and 9% SGST under Sl No. 35 of Notification 11/ 2017 –Central Tax (Rate) dated June 28, 2017 and Notification No.II(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated June 29, 2017 respectively.

In Re: M/s Zigma Global Environ Solutions Private Limited CITATION: 2020 TAXSCAN (AAR) 188

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Solid Waste Management by Revamping of Existing Dumped Garbage in Compost Yards by Bio-Mining process is exempted from Goods and Service Tax (GST). The applicant sought advance ruling on the issue of classification of the services in relation to Solid waste management by Revamping of existing dumped Garbage in compost yards by Biomining process provided by the applicant to M/s. Erode City Municipal Corporation, Erode.

The Authority consisting of Kurinjee Selvaan and Senthilvelavan ruled that the activities undertaken by the applicant such as consolidation of waste, temporary storage of hazardous and non-hazardous waste; treating and disposing of the waste by processing in a facility that meets legal standards, are all covered under the group 99943.

In Re: M/s Thamil Nadu Textbook and Educational Services Corporation CITATION: 2020 TAXSCAN (AAR) 178

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that GST is exempted on the supply of Dress, School Bag, Boots etc. to students without consideration to Government and Government Aided schools. The applicant has sought advance ruling on various issues. Firstly, whether the supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools based on the State Government educational policy for which the consideration is paid to Tamilnadu Text Book and Educational Services Corporation by the State Government by means of a budgetary allocation constitutes a supply. Secondly, if the answer to the above is in the affirmative then is Tamil Nadu Text Book and Educational Services Corporation is entitled to avail corresponding input tax Credit on the procurement made.

The two-member bench of Ms. Manasa Gangotri Kata and Thiru Kurinji Selvaan V.S ruled that The above activities of the applicant constitutes a supply; but exempt with effect from October 13, 2017, vide entry Sl.No.150 in the Notification No. 2/2017-C.T.(Rate) dated 28th June 2017 as amended by Notification No. 35/2017-C.T. (Rate) dated 13th October 2017 and therefore the applicant is not entitled to claim credit of tax paid on the related purchases of goods and services.

In Re:MFAR HOTELS & RESORTS PRIVATE LIMITEDCITATION: 2020 TAXSCAN (AAR) 106

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 18% GST is applicable to the supply of soft beverages or aerated water by the restaurant. The applicant sought the advance ruling on what is the rate of tax applicable on the supply of Soft Beverages (Aerated Water) and Tobacco (Smokes) when these items are supplied independently and not as composite supply in the restaurant.

The two-member bench of Manasa Gangotri Kata and KulinjeeSelvaan ruled that the supply of soft beverages/aerated water, whether in person or room service, by the restaurant located in the premises of the hotel of the applicant is taxable to CGST at the rate of 9% as per Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 and SGST at the rate of 9% as per Notification No. as per Notification No.II (2)/ CTR/ 532(d­14)/2017 dated 29.06.2017 as amended.

In Re: M/s SGS India Private Limited. CITATION: 2020 TAXSCAN (AAR) 177

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the testing of chemicals in fresh table grapes not exempted under agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing. The applicant has sought the advance ruling on the issue whether the supply of “inspection and testing services” on fresh table grapes is classifiable under entry 9986 of Notification no.11 /20I7-Central Tax Rate) dated June 28 20I7, support services to agriculture, forestry, fishing, animal husbandry chargeable to NIL rate of tax and Entry Entry 5(a) of exemption notification no.12/2017-Central Tax (rate) dated June 28,20I7.
The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan clarified that that supply of services classifiable under SAC 9986 and which are agricultural operations directly related to production of any agricultural produce are eligible for this exemption. Therefore, the AAR ruled that they are not directly related to the production of the table grapes. Accordingly, the activities of the applicant are not eligible for the exemption under therefore the applicant is not eligible for exemption at Entry No. 54(a) of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as amended and Notification dated 28.06.2017.

In Re:M/s ST ENGINEERING ELECTRONICS LTD CITATION: 2020 TAXSCAN (AAR) 109

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 12% GST applicable on Composite supply of works contract for construction, erection, commissioning, or installation of original works pertaining to Metro. The applicant sought the advance ruling on the issue whether rate of tax at 6% CGST, available to Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by way of construction, erection, commissioning, or installation of original works pertaining to Metro.
The two-member bench of Manasa Gangotri Kata and KulinjeeSelvaan ruled that considering all the submissions and that the application is pending before this authority for long, we find it appropriate to hold that the benefit of the entry at SI.No. 3(v) will be applicable to the applicant subject to the works undertaken by them being ‘Works Contract’ as per Section 2 (119) of the Act and the applicable GST is at the rate of 12% effective from January 25, 2018.

In Re: M/s IIT Madras Alumni Association CITATION: 2020 TAXSCAN (AAR) 176

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that collecting money by IITMAA from its members and receiving donations, subsidies, budgetary support from IIT is considered as Supply of Services. The applicant sought advanced ruling on the issue whether collecting money by IITMAA from its members and receiving donations/ grants/ subsidies/ budgetary support from IIT, Madras to defray expenses incurred towards administering the association and other expenses related to its engagement activities initiated by members themselves amounts to supply or not.

The two-member bench of Manasa Gangotri Kata and KulinjeeSelvaan ruled that the activities undertaken by the applicant for its members as defined in their Memorandum of Association and Byelaws, for which membership fee and other charges are collected, are covered under the definition of Supply of services under Section 7 of CGST or TNGST Act 2017. The AAR further held that the applicant having their annual turnover above the prescribed threshold as per Section 22 of CGST or SGST Act is liable to be registered under the Act.

In Re: M/s.Macro Media Digital Imaging Private Limited CITATION: 2020 TAXSCAN (AAR) 110

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the printing of content on the PVC materials of and supply of printed trade advertising material is a composite supply and 12% GST is applicable. The applicant has sought Advance Ruling on various issues that whether the transaction of printing of content provided by the customer, on poly vinyl chloride banners and supply of such printed trade advertisement material is supply of goods.
The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan observed that the primary part is the printed matter on Vinyl (Self Adhesive) when they serve as advertisement materials, the adhesive part is incidental to the primary use of the said goods and therefore in this case the outputs are classifiable under HSN 4911 as ‘Trade Advertisements’. The AAR clarified that the goods on which the applicant provides the printing activities ‘Trade advertisements’ are classifiable under Chapter 49 attracting CGST at the rate of 6%.

In Re: M/s Kumaran Oil Mill CITATION: 2020 TAXSCAN (AAR) 175

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that Input Tax Credit can be proportionately claimed on Goods/Services used in installation of Renewable Power Generation Plant under the ‘Renewable Energy Certificate (REC) Scheme’. The applicant sought the advance ruling that whether proportionate claim of input tax credit for procurement of capital goods can be made for power generation business.

The two-member bench of Manasa Gangotri Kata and KulinjeeSelvaan ruled that the applicant is eligible for Proportionate claim of Input Tax Credit as per Section 17(2) of the CGST or TNGST Act read with Rule 42 or Rule 43 of CGST/TNGST Rules 2017 on the Goods or Services used in installation of Renewable Power Generation Plant under the ‘REC Scheme’.

In Re: M/s Tube Investments of India Ltd CITATION: 2020 TAXSCAN (AAR) 174

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the activity of body building on truck chassis is a supply of service. The applicant, Tube Investments of India Ltd. is engaged in the business of manufacture and sale of cycles, metal forming products, tube products, and chains and also undertake the activity of body building for various customers across India. The applicant sought the advance ruling on the issue of whether the activity of building and mounting of the body on the chassis made available by the customers will result in supply of goods or supply of services.
The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan ruled that the activity of body building undertaken on a truck chassis made available by the consumer to the applicant amounts to supply of services under Schedule II clause 3 of CGST Act 2017.

In Re: M/s Kavi Cut Tobacco CITATION: 2020 TAXSCAN (AAR) 199

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that the Tobacco manufactured used for ‘chewing’ classifiable under CTH 2403, not as ‘unmanufactured tobacco’. The Appellant made an Application to AAR seeking advance ruling on the classification of the product intended for manufacture and applicable rate of Compensation Cess.
The AAR ruled that the product intended to be manufactured by the applicant and supplied as “Chewing tobacco” with the brand name “Kavi cut tobacco” is classifiable under CTH 2403 9970 as Chewing Tobacco. The AAR further ruled that the applicable rate of Compensation Cess is provided under Sl. No. 26 of the Notification No. 01/20l7-Compensation cess dated June 28, 2017 at the rate of 160%. The two-member bench of M.A. Siddique and K.V. Krishna Rao while upholding the ruling of the lower authority ruled that the raw material undergoes a set of processes and emerges as a distinct product which makes it marketable/consumable for the chewing needs. Therefore, the product supplied by the appellant is “Manufactured Tobacco product for Chewing”.

In Re: M/s ICU MEDICAL INDIA LLP CITATION: 2020 TAXSCAN (AAR) 198

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 18% Integrated Goods and Service Tax (IGST) leviable on reimbursement of ‘Wellsone Commercial Card’ expenses from the subsidiary company to its ultimate Holding company. The applicant sought the advance ruling on the issue of whether GST is leviable on the reimbursement of expenses from the subsidiary company to its ultimate Holding company located in a foreign territory outside India.

The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan ruled that the applicant is liable to pay IGST on the ‘Wellsone Commercial Card’ expenses paid by the applicant to its Ultimate Holding company, ICU Medicals Inc. having its place of business in the USA under Reverse Charge basis. The AAR further held that the applicant is liable to pay IGST under Reverse Charge, the applicable rate of IGST is 18%.

In Re: M/s GOURMET POPCORNICA LLP CITATION: 2020 TAXSCAN (AAR) 197

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 12% GST applicable on Pre-mix popcorn maize packed with edible oil and salt. The applicant was classifying premixed popcorn packets under HSN 2106 9909 & charging GST at the rate of 18%. The applicant sought the advance ruling on the question of what would be the accurate HSN code and consequently, the rate of GST applicable on pre-mix popcorn maize packed with edible oil and salt.
The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan deduced that the applicant only cleans and adds flavors to the corn kernels and they do not undergo any processes as per Chapter 7, 8 or 11 and even after adding salt, oil and flavors or spices, the essential nature of product still remains as ‘corn kernels’ i.e. the seeds of maize plant. The AAR thus held that pre-mix popcorn maize (corn kernels) packed with edible oil and salt supplied by the applicant will be classified under CTH 20081990 attracting GST at the rate of 12%.

In Re: M/s Johnson Lifts Private Ltd CITATION: 2020 TAXSCAN (AAR) 196

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that no ruling can be given as a transaction of supply on which advance ruling was sought was not furnished. The applicant sought advance ruling on the issue of whether SI.No. 3(v)(b) of Notification 11/2017-CT (Rate) 6% CGST is available, when Such building consists of more than one residential unit and falls under the definition of ‘residential complex; one unit is occupied by the customers and the other units are occupied by his father, brother, and sister, who are all not depending upon the customer, falls under the definition of ‘Single residential unit’ and what are the criteria that determine that a residential unit is a ‘Single residential unit’ within the meaning of item (v)(b) of serial number 3 in the tables in the notification 11 of 2017-CT(Rate) dated June 28, 2017.
The Authority consisting of members Manasa Gangotri Kata and ThiruKurinji Selvan V.S observed that the applicant in their application and during the hearings and thereafter, has not furnished the details of supple made or intended to be supplied and have further stated that they have not accepted such type of contract wherein the customer owning a single piece of land consisting of dwelling units for himself and his father, sister, brother and had required supply, erection and commissioning of lifts.

In Re: M/s Rajesh Rama Varma CITATION: 2020 TAXSCAN (AAR) 195

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that GST is applicable to IT software related consulting services in Oracle ERP. The applicant, Rajesh Rama Varma provides IT software related consulting services in the area of Oracle ERP with relation to Oracle Financials to Doyen for a consultancy fee laid down in the consultancy agreement. The applicant sought advance ruling on the issue of whether the GST is applicable to IT software related consulting services in Oracle ERP.
The Authority consisting of members Manasa Gangotri Kata and Thiru Kurinji Selvan V.S ruled that GST is applicable to IT software related consulting services in Oracle ERP as the said activity satisfies the conditions of Section 7(1)(a) and is a supply under GST. As per Para 5 of Schedule II read with Section 7(1A), this supply is a supply of services. Therefore, the applicant is liable to pay GST at appropriate rates on the supply of consultancy services to Doyen. “In respect of the questions whether such supply of services is ‘export of services’ ‘zero-rated supply’ and eligibility of refund, this authority’ cannot answer the questions as they are not covered in Section 97(2) of the CGST/TNGST Act,” the AAR ruled.

In Re: M/s lnventaa LED Lights Private Limited CITATION: 2020 TAXSCAN (AAR) 101

In recent order Authority for Advance Ruling(AAR), Tamil Nadu ruled that supply of LED stem (long bulb) that is outdoor lighting fixtures with LED integrated inside them is taxable at the rate of 6% CGST and with 6% SGST. The applicant had applied for an Advance Ruling seeking the classification and the rate for the products dealt by them. However as they were informed that the question has to specifically state the models, they were seeking an advance ruling in respect of Category A products – LED stem Long bulb used in LED Garden Lights, LED Outdoor Lights, and LED Bollard Series. The issue concerning was whether the supply of full product of the LED stem with fixtures or fittings is single or composite or mixed supply and the applicable GST Tariff code and rate.
The Coram consisting of Ms. Manasa Gangotri Kata (Member, CGST) and Mr. KurinjiSelvaan V.S (Member, TNGST) applied the explanation (iii) and (iv) to Notification No. 1/2017 – Central Tax (Rate) Dt. 28-06-2017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule for interpretation and classification of goods. The bench further determined the GST rate of the LED lights or fixtures including LED lamps at 6% CGST and 6% SGST.

In Re: M/s Rich Dairy Products (India) Pvt Ltd CITATION: 2020 TAXSCAN (AAAR) 126

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) upheld the order of the Authority of Advance Ruling (AAR) and held that the carbonated fruit juices such as ‘Richyaa Darner Lemon’ and ‘Licta Lemon’ supplied by the applicant are classifiable under CTH 22021020 and all others i.e. ‘Richyaa Darner Cola’, ‘Licta Cola’, ‘Richyaa Darner Jeera Soda’, ‘Licta Jeera Masala’, ‘Richyaa Darner Orange’ and ‘Licta Orange’ are classifiable as ‘Other’ under CTH 22021090. Hence, in the GST Council Meeting, it was held that 28% plus cess will be applicable.

The bench consisting of the members, Sanhita Sharma and M.A. Siddique uphold the decision of the Authority of Advance Ruling (AAR) and held that the products ‘Richyaa Darner Lemon’ and ‘Licta Lemon’ to be supplied by the applicant are classifiable under CTH 22021020 and all others i.e. ‘Richyaa Darner Cola’, ‘Licta Cola’, ‘Richyaa Darner Jeera Soda’, ‘Licta Jeera Masala’, ‘Richyaa Darner Orange’ and ‘Licta Orange’ are classifiable as ‘Other’ under CTH 22021090. Hence, in the GST Council Meeting, it was held that 28% plus cess will be applicable.

In Re: M/s Venbakkam Commandur Janardhanan CITATION: 2020 TAXSCAN (AAR) 189

The Tamil Nadu Authority of Advance Ruling (AAR) has ruled that the supply of DVDs and CDs with Licensed Software cannot be treated as e-books for the purpose of attracting a lesser rate of 5% GST. The applicant sought the advance ruling on the issue whether the assessee/dealer which publishes law journals in print and sells the same content that is in books in an electronic form in DVD’s/CDs with software to search and read it in computers and handheld devices come under the category of E-Book so that it can avail the benefit of the notification dated 26.07.2018 in respect of E-book.
The authority consisting of members Manasa Gangotri Kata and KurinjiSelvaan V.S. ruled, “the supply of DVDs/CDs with The Law Weekly Desktop’ software along with end-user license and the supply of access to the on-line database on the applicant’s website are not eligible to avail the benefit of entry at SI.No. 22 of Notification No. 13/2018-C.T.(Rate) dated 26.07.2018 notification dated 26.07.2018.” Further, while addressing other issues such as the utilization of credit availed by the applicant and is on the reversal of credit availed earmarked for it under Section 97(2), the authority refused to comment due to lack of jurisdiction.

In Re: M/s Britannia Industries Limited CITATION: 2020 TAXSCAN (AAR) 187

The Tamil Nadu Authority for Advance Ruling (AAR) ruled that UHT Sterilized Flavoured Milk marketed under the brand name ‘Britannia Winkin’ Cow Thick Shake’ by the applicant is classifiable as “flavoured milk” and therefore, attracts 12% GST. The applicant has sought the advance ruling on the issue, whether UHT Sterilized Flavoured Milk is classifiable under Chapter 4 which pertains to Tariff Heading 0402 which covers ‘Milk containing added sugar or other sweetening matter’ or alternatively, Tariff Heading 0404 which covers ‘Other’, i.e. ‘products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included’.
The Authority consisting of members Manasa Gangotri Kata and Kurinji Selvaan V.S. ruled that UHT Sterilized Flavoured Milk marketed under the brand name ‘Britannia Winkin’ Cow Thick Shake’ by the applicant is not classifiable under the Tariff heading ‘0402 /0404″ but classifiable under CTH 22029930.

In Re: M/s Electroplating And Metal Finishers CITATION: 2020 TAXSCAN (AAR) 186

The Authority for Advance Ruling (AAR), Tamilnadu bench has recently held that the electroplating is a supply of service, 18% of GST is applicable for goods belonging to an unregistered person and 12% of GST respectively after October 2019. The applicant has sought for an Advance Ruling to confirm the Rate of Tax on GST for the nature of the job (platting done on customer material as per customer specification) done by the applicant.
The Coram comprising of Additional Commissioner, Manasa Gangotri Kata and Joint Commissioner, Thiru Kurinji Selvaan delivered the order based on an application filed by Electroplating And Metal Finishers. The authority observed that the applicant is a registered person and when he undertakes electroplating activities on the goods belonging to another registered person, then the nature of the work of the applicant is Job work. The authority further said that the activity of electroplating undertaken by the applicant is ‘Supply of service’ and for the period from 01.lO.2OI9, The goods are belonging to another Registered person, the applicable rate of tax is 6% CGST and 6% SGST as amended and the goods belonging to an unregistered person, the applicable rate of tax is 9% CGST and 9% SGST as amended.

In Re: M/s PONRAJ CITATION: 2020 TAXSCAN (AAR) 185

The Authority for Advance Ruling ( AAR ), Tamil Nadu ruled that the Non-woven PP Rice Bags / Sacs 6% CGST as per Sl.No.8OAA of Schedule II of Notification dated 28.06.2OI7 as amended and 6% SGST as per S.No. 80AA of Schedule-Il dated 29.06.2017 as amended and effective O1.O1.2O2O.

The coram comprising of Additional Commissioner Manasa Gangotri Kata and Joint Commissioner, KurinjiSelvaan V.S pronounced the ruling based on an application filed by V. Ponraj, Proprietor, M/s PPP Associates. The authority observed the applicable rate for the bag of value not exceeding Rs.10O0 per piece is 2.5% CGST as per Sl.No. 224 of schedule I of Notification dated 28.06.2017 and 2.5% SGST as per S.No. 224 of Schedule-I dated 29.06.2017 up to 3O.O9.2O19. The authority further observed that thereupon up to 37.12.2019, the applicable rate is 6% CGST as per Sl.No.8OAA of Schedule II of Notification dated 28.06.2OI7 as amended and 6% SGST as per S.No. 80AA of Schedule-Il dated 29.06.2017 as amended and effective O1.O1.2O2O.

In Re: M/s Automative Components Technologz India Private Limited CITATION: 2020 TAXSCAN (AAR) 184

The Authority for Advance Ruling ( AAR ) has held that Goods and Services Tax ( GST ) will be applicable for transfer of title in moulds from the foreign supplier to the Applicant and Transfer of title in moulds from the Applicant to the Indian buyer.
The authority observed that any transfer of the title in goods is a supply of goods and it is evident that ‘transfer of the title in goods’ is the supply of goods. The transfer in title of moulds for consideration and the supply is in the course of business therefore, the same constitutes the supply of goods and GST is liable to be paid on such supply.

In Re: M/s Specsmakers Opticians Private Limited CITATION: 2020 TAXSCAN (AAR) 183

The Tamil Nadu State Appellate Authority for Advance Ruling (AAAR) held that Head office adopting the value for supply to other branches is eligible for Input Tax Credit (ITC) as provided under Proviso 2 to Rule 28 of the CGST/TNGST Rules 2OI7.

The Bench ruled that the appellant is eligible to adopt the value as per Second Proviso to Rule 28 of the CGST/TNGST Rules 2OI7, at the time of supply of goods from the State of Tamilnadu in the terms of the scenario discussed, in as much as the recipient distinct person is eligible for full Input Tax credit as required under the said proviso.

In Re: M/s Sanghvi Movers Limited CITATION: 2020 TAXSCAN (AAR) 181

The Tamil Nadu State Appellate Authority for Advance Ruling (AAAR) held that Input tax credit of tax paid by Head office for the furtherance of business, subject to other conditions of eligibility to such credit as per Section 16 of CGST/TNGST Act 2OI7.
The Authority observed that there is no reason to restrict the eligibility of ITC credit under Section 16 (2) of the Act of which the input tax credit paid by the SML HO, in the hands of the appellant as it has been substantially brought out that the ‘consideration’ stands paid to the SML HO either by the customer of the Appellant or by setting off against the payables of the appellant to SML HO, in respect of lease/hire of Cranes, etc which is as per the established accounting principles. Court held that GST paid by the SML Maharashtra on the lease of Cranes, to their distinct personalities, for sub-lease to the ultimate customer is eligible as a credit in the hands of other branches.

In Re: M/s RB Shah Enterprises India Private Limited CITATION: 2020 TAXSCAN (AAR) 162

The Authority of Advance Ruling ( AAR ) in Tamil Nadu held that the mixed supply of services that are billed at a single price is liable for a highest GST rate of the services supplied ie. 18%. The ruling was made by bench comprising of members Ms. Manasa Gangotri Kata, IRS Member, CGST and ThiruKurinjiSelvaan V.S Member. TNGS in the case of M/s. R.B. Shah Enterprises India Pvt Ltd, who has sought Advance Ruling on the question of what is the applicable rate of GST for the service provided for a whole sum price.

“The supplies made by the applicant as enumerated in the service order of M/s. Sitaraman Shipping Service is ‘Mixed supply ‘and the rate of tax is the highest rate applicable to the various services supplied by the applicant which is 9% CGST as per Notification No. II/2OI7- C.T.(Rate) dated 28.06.2017 as amended and 9%o SGST vide Notification No. II (2)/CTR/532(d- 14)/2017 vide G.O. (Ms) No.72 dated 29.06.2017 as amended. Therefore, as per Section 8 of the ACT, the rate of tax of this mixed supply which is billed at a single price is the rate of the highest rate of the services supplied which is 18%” the Tribunal observed.

In Re: M/s CMC Vellore Association CITATION: 2019 TAXSCAN (AAR) 140

The Authority for Advanced Ruling (AAR), TamilNadu ruled that Goods and Services Tax (GST) is not applicable for the supply of inpatient health care services rendered by the hospital.

The AAR observed that from a joint reading of the ‘Explanation of service ‘pertaining to ‘Inpatient services’ and the exemption above, it is evident that the exemption is applicable to a “Clinical Establishment” when services by way of diagnosis or treatment or care for illness, etc. are undertaken by such establishment under the directions of a medical doctor. The applicant hospital is a Clinical Establishment and for the health care services, as defined in the Notification above provided including the supply of medicines, implants and consumables, they are exempted from CGST and SGST.

In Re: M/s Sree Varalakshmi Mahaal LLP CITATION: 2019 TAXSCAN (AAR) 139

The Authority of Advance Ruling (AAR), Tamil Nadu ruled that Input Tax Credit (ITC) is not available on against any goods or services received by the applicant for construction of the Marriage Hall on his own account even if used in course or furtherance of his business of renting the place Goods and services tax act 2017.

The AAR observed that in the instant case the applicant has himself built the marriage hall for which he has received various input services. He is using the hall to rent out to customers for occasions i.e. for the furtherance of his business. Therefore, as per section 17(5) (d), no ITC is available on any goods or services received by him for such construction and the same cannot be claimed by him.

In Re: M/s VENKATASAMY JAGANNATHAN CITATION: 2019 TAXSCAN (AAR) 138

The Tamil Nadu bench of the Authority of Advance Rulings ( AAR ) in an application filed by Venkatasamy Jagannathan ruled that, the Profit Sharing Agreement between the applicant ad various shareholders of Star Health and Allied Insurance Ltd is an actionable claim and is as neither a supply of goods nor a supply of services covered under Schedule III to CGST Act and SGST Act and hence is not taxable to CGST or SGST.

The Bench constituting of members Ms MG Kata and TK Selvaan ruled that the PSA between the applicant and various shareholders of Company is an actionable claim and is neither a supply of goods nor a supply of services and hence is not taxable to CGST or SGST Act. The Bench elaborated that in the instant case, the parties to PSA have agreed to pay a certain sum in the event of strategic sale where at least 51% of paid-up equity share capital of the company is sold at a price of Rs 75 per equity share. The applicant has a claim to specified amounts in event of the occurrence of the strategic sale making his claim contingent on happening of an event. Hence, the PSA was ruled to be an actionable claim.

In Re: M/s HP india Sales Private Limited CITATION: 2019 TAXSCAN (AAR) 137

The Tamil Nadu Authority for Advance Rulings in an application filed by HP India Sales Pvt Ltd held Desktop Computer known as Central processing unit along with its connected peripheral units is a single supply leviable to 9% GST. The issue for consideration before the present Authority was regarding the determination of the applicable rate on supply of desktops consisting of CPU, monitor, keyboard and mouse or any combination of input/output unit. It involves the determination of whether the CPU along with the Monitor or other input/output units supplied by the applicant is a ‘single supply’.

Notification No: G.S.R. 279(E). CITATION: 1st April, 2019

The Tamil Nadu Advance Ruling Authority has exempted Vadam/Papad made of Maida from GST. The order was based upon the application for advanced ruling by one M/s. Subramani Sumathi who are manufacturers of Maida Papad based in washermenpet, Chennai.

The Authorities was to decide whether the product in question is ‘Papad’ falling under Ch.1905 or a ‘namkeen’ falling under Ch.2706 of the act. IRS member Ms. Manasa Gangotri Kata, and FAC member Mr. Thiru S. Vijayakumara after considering the facts, submissions presented and the provisions of the act ruled, “The Applicants product namely “Maida Vadam/Papad” is classifiable under ‘19050540’ and is exempted from CGST and SGST.”

In Re: M/s RmKV Fabrics Private Limited CITATION: 2019 TAXSCAN (AAR) 136

The Authority for Advance Rulings (AAR), Tamil Nadu has held that a salwar/churidar-kurta set comprising three pieces, top, bottom and dupatta which are just fabric or articles of apparels would attract 5% GST.

The authority clarified that a completely unstitched sets will be classified as ‘fabrics’ and attract five per cent GST, just embroidery or embellishment will not make any difference to it. The authority also held that partially stitched churidars will make it ‘Article of Apparel’ for which 5 per cent (for sale value less than Rs. 1,000) or 12 per cent (for sale value more than Rs. 1,000) would be applicable.

In Re: M/s Dream Runners Foundation Limited CITATION: 2019 TAXSCAN (AAR) 135

The Authority for Advance Ruling (AAR), Tamil Nadu has held that conducting marathon by a Charitable Trust would be subject to GST as the same do not constitute a ‘charitable activity’. They sought for an Advance ruling on whether the conduct of marathon events by the Trust through which donations are raised for charity is an exempted service under GST?

The authority noted that the Applicant is an entity registered under Section 12AA of Income Tax Act. It was noted that only those activities of such an entity are exempt from GST which qualify under the definition of “charitable activities” given in the notification. “This activity of conduct of Marathon event by the Applicant does not fall under the definition for Charitable activities mentioned under clause 2 of Notification. Therefore, though the Applicant is an entity registered under Section 12 AA of the Income Tax Act and conducts the Marathon events for raising funds for charitable activities, the exemption under Sl.No. 1 of these notification does not apply to the activity of organizing the marathon by the Applicant,” the authority said.

In Re: M/s MRF Limited CITATION: 2019 TAXSCAN (AAR) 134

The Authority for Advance Rulings (AAR), Tamil Nadu has held that the value of the discounts as per C2FO software which is paid to the suppliers must be deducted from the invoice value for availing Input Tax Credit in view of Section 16 of the CGST Act 2O17/TNGST Act 2O17. The question before the AAR was that whether the Applicant can avail the Input Tax Credit of the full GST charged on the supply of invoice or a proportionate reversal of the same is required in case of post purchase discount given by the supplier of the goods or services.

In the instant case, the Applicant can avail Input Tax Credit only to the extent of the invoice value less the discounts asper C2FO software. If he has availed input tax credit on the full amount, he should reverse the difference amount equal to the discount, to avoid adding to his output liability,” the authority said.

In Re: M/s. Naga Limited CITATION: 2018 TAXSCAN (AAR) 137

The Advance Ruling Authority ( AAR ), Tamilnadu, has dismissed an application as it is found that the application by a service recipient on exemption notification was not maintainable under GST. Before the authority, the applicant sought advance ruling on ‘whether exemption provided under the chapter heading9986 in Sl.No54(e) of GST Notification No.12/2O17-CT(R)dated 28.6.2017 for the service providers who have rendered Handling services such as loading , unloading, packing , storage or ware housing of agricultural products was applicable for agricultural products viz. wheat, when imported through sea ports.
“It is made clear that the applicant do not make any of the supplies in question, but are in fact the recipients of the various supplies as stated in their application. Thus, the question is on the liability to pay tax on the services supplied to them and not on the supply made by them,” the authority said.

In Re: M/s. Adwitya Spaces Private Limited CITATION: 2018 TAXSCAN (AAR) 136

The Authority for Advance Ruling (AAR), Tamil Nadu held that Input Tax Credit of the CGST & SGST charged in respect of brokerage services can be adjusted against output tax payable against Renting of immovable property.

The authority noted that the inward supply rendered by catalyst Consulting is not listed in any of the exceptions mentioned in Section 17(5) of CGST Act/ SGST Act for availing the input tax credit of CGST and SGST. It was therefore, held that the applicant is eligible to take credit of the CGST & SGST charged by M/s. Catalyst Consulting Chennai in the Tax invoice No. C-OO7 lI7-I8 dated 20.I2.2O17 raised on the applicant for real estate brokerage services for renting of property on a fee basis rendered by Catalyst Consulting, subject to the conditions as per Section 16, 17 and 18 of CGST & SGST Act.

In Re: M/s Takko Holding GmbH CITATION: 2018 TAXSCAN (AAR) 135

The Authority for Advance Ruling (AAR), Tamil Nadu has held that the liaison offices established with the prior permission of the Reserve Bank of India (RBI) and the activities of the same are strictly in line with condition specified by RBI permission letter do not amount to supply under CGST und SGST Act.

The authority noted that the applicant/liaison office is working as per the terms and conditions stipulated by RBI and the reimbursement of expenses & salary of employees is paid by Mls Takko Holding GmbH to the liaison office. “No consideration for any activity is being charged by the liaison office and the liaison office does not have any business activities of its own as specified by RBI conditions,” the authority said.

In Re: M/s. Goodwill lndustrial Canteen CITATION: 2018 TAXSCAN (AAR) 134

The Authority for Advance Rulings (AAR), Tamilnadu has held that the supply of food and beverages in the offices by the caterers would attract 5 percent GST after 26th July 2018.

The AAR held that “the applicant is making supply of services in the dining space of the industrial units and offices which is squarely covered in the Explanation 1 to Sl.No 7(i) and Sl.No 7(v) now only covers supply at functions which are occasional and event based. The supply of food to institutions which were earlier covered under entry at Sl.No.7(v) has been included under Sl.No. T(i)of the Notification No. 71/2017- CT (Rate) with effect from 27th July 2018 and thereupon is liable to tax at the rate of S% subject to the condition that credit of input tax charged on goods and services used in supplying the services are has not been taken read with Explanation (iv) of said Notifications.”

InRe:M/s.Erode Manjal Vanigarkal Matrum KidanguUrimaiyalargal CITATION: 2018 TAXSCAN (AAR) 133

The Authority for Advance Rulings (AAR), Tamilnadu has held that the services by the commission agents to the agriculturalists of turmeric can be treated as “ support services ” for which no Goods and Services Tax (GST) is payable.

The Authority observed that the service by the Commission Agents as per the submissions of the applicant to the agriculturists of turmeric is service under the Heading 9986 and is taxed to ‘NlL’ rate of CGST. The authority further noted that the activities of the applicant are those covered by the definition of ‘Commission agent’ under ‘The Tamil Nadu Agricultural Produce Marketing (Regulation) Act, t987’.

In Re: M/s HYT SAM INDIA (JV) Hiregange& Associates CITATION: 2021 TAXSCAN (AAAR) 104

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) while upholding the ARR’s Ruling held that 12% GST on supply of machine, plant, and equipment including commissioning of spares, erection, commissioning of all civil structures, supply of electrical equipment. The applicant has sought the advanced ruling on the issue whether the works awarded to the applicant is composite supply of services, whether the benefit of sl.No.3(v) of notification no.11/2017- Central Tax (Rate) is applicable to subject works.

The AAR ruled that with respect to supply of machine, plant and equipments including commissioning of spares in Schedule 1, erection and commissioning of all civil structures in Schedule II, supply of electrical equipment including commissioning of spares in Schedule III, the same is a composite supply of works contract for original works pertaining to railways and is taxable at 6% CGST as per sl. No. 3(v)(a) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended.

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