Complete GST AAR & AAAR Rulings Case Digest: West Bengal

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. As per section 95 of CGST/SGST Law and section 12 of UTGST law, ‘advance ruling’ means a decision provided by the authority or the Appellate Authority to an applicant on matters or on questions specified in section 97(2) or 100(1) of CGST/SGST Act as the case may be, in relation to the supply of goods and/or services proposed to be undertaken or being undertaken by the applicant. In Re M/s LANDMARK CARS EAST PRIVATE LIMITED CITATION: 2024 TAXSCAN (AAR) 139 The West Bengal Authority of Advance Ruling ( AAR ) has determined that a GST of 18% must be paid on the sum received by the applicant from Mercedes-Benz India as reimbursement for the “Loss on Sale of Demo Car.” The Authority Bench of Tanisha Dutta and Joyjit Banik concluded that the applicant can indeed claim input tax credit on cars used for demonstration purposes and subsequently sold after a specified period. The ruled that these vehicles fall under Chapter 8702 or 8703 for classification purposes, with the same tax rate applicable for their sale as for their purchase, subject to Section 14 of the GST Act. It was added that, “We find that ‘agreeing to tolerate an act‘ having SAC 999794 is classifiable under ‘Other Miscellaneous services‘ and is taxable @ 18% vide serial number 35 of Notification No. 11/2017-Central Tax I (Rate) dated 28.06.2017, as amended.” In Re SEKANDAR SARDAR CITATION: 2024 TAXSCAN (AAR) 146 The West Bengal Authority of Advance Ruling ( AAR ) has held that the supply of disposable paper cups attracts 18% GST. It was observed that manufactured disposable paper cups are covered under HSN 4823-4000. The two-member bench of Tanisha Dutta and Joyjit Banik observed that it is covered under the description falling under Chapter, Heading, Sub-heading, or Tariff Item 4823, as specified in entry serial number 157 of Schedule-III of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 (as amended). The AAR held that the supply of disposable paper cups as manufactured by the applicant is covered under HSN 4823-4000 and would attract 18% GST. In Re: M/s chanakya Saha & Giriraj Telecom) CITATION: 2024 TAXSCAN (AAAR) 101 The West Bengal Appellate Authority for Advance Ruling ( AAAR ) recently ruled that GST is not payable by fair price shop selling kerosene oil to ration-card holders. A Two-Member Bench comprising Navneet Goel and Devi Prasad Karanam observed that “The appellant in the present case, is a Fair Price Shop and is providing service to the State Government by way of distributing of S. K. Oil as agent, it decided that the afore-mentioned notification is applicable for the appellant and the appellant is entitled for the benefit extended by the said notification. Since, in terms of the said Notification, the Tax liability of the appellant while providing service to the State Government is ‘NIL’ the question of charging GST from the State Government becomes inapplicable.” In Re M/S: PRINSEP ASSOCIATION OF APARTMENT OWNERS CITATION: 2024 TAXSCAN (AAR) 123 The West Bengal Authority for Advance Ruling ( AAR ) has held that the common area electricity charges collected by Residential Welfare Associations ( RWAs ) from their members are deemed part of a composite supply and are liable to Goods and Services Tax ( GST ) if the service provided does not qualify for exemption. In conclusion, the two-member authority comprising Dr. Tanisha Dutta ( CGST Member ) and Joyjit Banik ( SGST Member ) clarified that common area electricity charges collected by RWAs from their members are deemed part of a composite supply and are liable to GST if the service provided does not qualify for exemption under GST regulations. In Re: PARAGON POLYMER PRODUCTS PVT LTD CITATION: 2024 TAXSCAN (AAR) 120 A two member bench of West Bengal Authority for Advance Ruling Goods and Services Tax ( AAR ) held that settlement of mutual debts through book adjustment is a valid mode of payment under the Goods and Service Tax ( GST ) Act, 2017. The authority observed that Input Tax Credit ( ITC ) is allowable for goods purchased from external vendors when payment is settled through book adjustment in sale and buyback transactions. The bench comprising Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGST ) held that settlement of mutual debts through book adjustment is a valid mode of payment under the GST Act. Recipient can pay the supplier by way of setting book debt since the provision of the Act has not put any restriction in this regard. Therefore, claiming credit of Input Tax Credit ( ITC ) cannot be denied on the sole ground that consideration is paid through book adjustment. In Re: M/S SWAPNA PRINTING WORKS PVT LTD CITATION: 2024 TAXSCAN (AAR) 119 The West Bengal Authority for Advance Ruling ( AAR ) of Goods and Services Tax matters has ruled that supply of services which does not involve any supply of goods can be regarded as pure services. The two member bench comprising Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGST ) held that “term “pure services‟ has not been defined under the GST Act. However, a bare reading of the description of services as specified in serial number 3 above denotes that supply of services which does not involve any supply of goods can be regarded as pure services. The said entry serial, therefore, specifically excludes works contract services or other composite supplies involving supply of any goods. On the other hand, to qualify to be a supply under serial number 3A above, a composite supply, subject to fulfilment of other conditions as specified in the said entry, would be such that the maximum value of involvement of goods is less than 25% of the total value of the said composite supply.” In Re M/s SUN KNOWLEDGE PRIVATE LIMITED CITATION: 2024 TAXSCAN (AAR) 117 The two member bench of West Bengal Goods and Services Tax ( GST ) Authority for Advanced Rulings ( Aar ) ruled that a registered person is eligible to avail credit of input tax if all the conditions laid down in section 16 of the Goods and Services Tax ( GST ) Act, 2017 get fulfilled and such credit is not restricted under sub-section (5) of section 17 of the Act GST Act. The two member bench comprising Dr Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGSTA ) held that registered person is eligible to avail credit of input tax if all the conditions laid down in section 16 of the GST Act get fulfilled and such credit is not restricted under sub-section (5) of section 17 of the GST Act. The Authority ruled that the tax paid by the assessee on hiring charges is not restricted under sub-section (5) of section 17 of the GST Act. As a result, we hold that the applicant is entitled to take credit of input tax charged by his supplier, namely TCGUIH, subject to fulfillment of all the conditions under section 16 of the GST Act. In Re: SWAPNA PRINTING WORKS PVT LTD CITATION: 2024 TAXSCAN (AAR) 103 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that printing and supply of textbook to Jharkhand Council of Educational Research and Training ( JCERT ) was supply of goods The two member bench of the tribunal comprising Dr. Tanisha Dutta ( member ) and Joy Jit Banik ( member ) concluded that printing and supply of textbooks to JCERT shall be treated as supply of goods. In Re: SWAPNA PRINTING WORKS PVT LTD CITATION: 2024 TAXSCAN (AAR) 103 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that printing and supply of notebook was supply of goods The two member bench of the tribunal comprising Dr Tanisha Dutta ( member ) and Joy Jit Banik ( member ) concluded that Printing and supply of notebook would be treated as supply of goods In Re: SWAPNA PRINTING WORKS PVT LTD CITATION: 2024 TAXSCAN (AAR) 103 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that Printing and supply of Bilingual parental calendar to Jharkhand Education Project Council ( JEPC ) was supply of service The two member bench of the tribunal comprising Dr Tanisha Dutta ( member ) and Joy Jit Banik ( member ) concluded that Printing and supply of “Bilingual Parental Calendar” to JEPC would be treated as supply of services In Re: PARAGON POLYMER PRODUCTS PVT LTD CITATION: 2024 TAXSCAN (AAR) 104 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that Input Tax Credit ( ITC ) admissible on goods purchased from outsourced vendors for Sale and buy back transactions. The two member bench of the tribunal comprising Dr Tanisha Dutta ( member ) and Joy Jit Banik ( member ) concluded that in case of sale and buyback transactions, the input tax credit was admissible in respect of goods purchased from outsourced vendors, when payment was settled through book adjustment against the debt created on outward supplies to those vendors. In Re: ANMOL INDUSTRIES LIMITED CITATION: 2024 TAXSCAN (AAR) 106 The West Bengal bench of the Authority for Advance Ruling (AAR) observed that services of leasing land for industrial purposes cannot be treated as an exempt supply The two member bench of the authority comprising Dr.Tanisha Dutta ( member) and Joyjith Banik ( member) conclude that the services of leasing of the land for industrial purposes by SMPK to the applicant is found not to be covered under entry 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 and therefore cannot be treated as an exempt supply. In Re: DREDGING AND DESILTATION COMPANY PRIVATE LIMITED CITATION: 2024 TAXSCAN (AAR) 105 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that supply of services for removal of hump by dredging at Najafgarh Drain as awarded by Irrigation and Flood Control Department is exempt from Goods and Service Tax ( GST ) The two member bench of the tribunal comprising Dr. Tanisha Dutta (member) and Joy Jit Banik (member) observed that Supply of services being undertaken by the applicant for removal of hump (silt/ earth/ manure/ sludge etc.) by dredging at Najafgarh Drain as awarded by the Irrigation and Flood Control Department, Government of Delhi shall be covered under Sl. No. 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 and therefore shall be exempted from payment of tax. In Re: SWAPNA PRINTING WORKS PVT LTD CITATION: 2024 TAXSCAN (AAR) 103 The West Bengal bench of the Authority for Advance Ruling ( AAR ) observed that printing and supply of comprehensive report, progress card to education department, Government of Assam was supply of services The two member bench of the tribunal comprising Dr Tanisha Dutta ( member ) and Joy Jit Banik ( member ) concluded that Printing and supply of Comprehensive Report Progress Card to the Education Department, Government of Assam would be treated as supply of services. In Re: M/s chanakya Saha & Giriraj Telecom) CITATION: 2024 TAXSCAN (AAAR) 101 The appellant is an entity engaged inter-alia in the trade of Super Kerosine Oil, hereinafter also referred to as SK Oil, as a holder of license issued by the Government of West Bengal, authorizing him as a “Dealer” as defined under Kerosene Control Order, 1968. A Two-Member Bench comprising Navneet Goel and Devi Prasad Karanam observed that “The appellant in the present case, is a Fair Price Shop and is providing service to the State Government by way of distributing of S. K. Oil as agent, it decided that the afore-mentioned notification is applicable for the appellant and the appellant is entitled for the benefit extended by the said notification. Since, in terms of the said Notification, the Tax liability of the appellant while providing service to the State Government is ‘NIL’ the question of charging GST from the State Government becomes inapplicable. In Re M/S: PRINSEP ASSOCIATION OF APARTMENT OWNERS CITATION: 2024 TAXSCAN (AAR) 123 The West Bengal Authority for Advance Ruling ( AAR ) has held that the common area electricity charges collected by Residential Welfare Associations ( RWAs ) from their members are deemed part of a composite supply and are liable to Goods and Services Tax ( GST ) if the service provided does not qualify for exemption. In conclusion, the two-member authority comprising Dr. Tanisha Dutta ( CGST Member ) and Joyjit Banik ( SGST Member ) clarified that common area electricity charges collected by RWAs from their members are deemed part of a composite supply and are liable to GST if the service provided does not qualify for exemption under GST regulations. In Re M/S: PRINSEP ASSOCIATION OF APARTMENT OWNERS CITATION: 2024 TAXSCAN (AAR) 123 The West Bengal Authority for Advance Ruling ( AAR ), has made a clarification regarding the taxation of maintenance charges levied by Residential Welfare Associations ( RWAs ) on their members. The ruling clarified that maintenance charges exceeding Rs.7,500 per month per member are fully taxable under the Goods and Services Tax ( GST ) regime at the rate of 18%. In result, the two-member authority comprising Dr. Tanisha Dutta (CGST Member) and Joyjit Banik (SGST Member) has held that if the maintenance charges levied by the Residential Welfare Associations ( RWAs ) on their members exceed Rs.7500 per month per member, then the entire amount is subject to GST at the rate of 18%. In Re M/S: PRINSEP ASSOCIATION OF APARTMENT OWNERS CITATION: 2024 TAXSCAN (AAR) 123 The West Bengal Authority for Advance Ruling ( AAR ) has held that the contributions made by members to the sinking fund of Residential Welfare Associations ( RWAs ) shall be deemed as advance payments for future services and are liable to 18% Goods and Services Tax ( GST ). In result, the two-member authority comprising Dr. Tanisha Dutta ( CGST Member ) and Joyjit Banik ( SGST Member ) has held that contributions to the sinking fund of RWAs by its members are considered advance payments for future services provided by the RWA. This means that members’ contributions towards the sinking fund are subject to GST at the rate of 18%. The ruling highlighted that even though these contributions are made for future contingencies, they are treated as consideration for the future supply of services by the RWA. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Complete GST AAR & AAAR Rulings Case Digest: West Bengal

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