The West Bengal Authority for Advance Ruling (AAR) ruled that no GST chargeable to State Government as Fair Price Shop not making any supply to State Government.
The applicant, Chanchal Saha, is an entity engaged inter-alia in the business as holder of license issued by the Government of West Bengal, authorising him to carry on trade in Super Kerosine Oil, hereinafter also referred to as SK Oil, as a “Dealer” as defined under the Notification No. 2565/FS/FS/Sectt/Sup/4M-16/2014 dated 3rd November 2014 which was issued by the Department of Food and Supplies, Government of West Bengal.
The appellant has sought advance ruling on whether the applicant being a Fair Price Shop as defined under the Notification No. 2565/FS/FS/Sectt/Sup/4M-16/2014 dated 3rd November 2014 issued by the Government of West Bengal, is liable to charge GST from the State Government against the supply made by them?
The applicant submitted that to arrive at the interpretation of taxability of each of the elements, the District Controller, Food and Supplies Department, Government of West Bengal, has placed reliance on the order issued by the Principal Secretary to the Government of West Bengal, Food and Supplies Department, dated 03/11/2017 to state that the tax rate would be NIL for both Central and State GST.
Clause (4) of section 2 of the National Food Security Act, 2013 wherein ‘Fair Price Shop’ has been defined as under: “fair price shop means a shop which has been licensed to distribute essential commodities by an order issued under Section 3 of the Essential Commodities Act, 1955 to the ration card holders under the Targeted Public Distribution system”. The above definition thus covers fair price shops that have been licensed to distribute to the ration card holders under the Public Distribution System.
In exercise of the power conferred by Section 3 of the Essential Commodities Act, 1955, the Government of West Bengal issued the West Bengal Public Distribution System (Maintenance & Control) Order, 2013 on 08/08/2013. The said order defines fair price shops as following: “Fair Price Shop” means a shop engaged and licensed under this Control Order for distribution of public distribution commodities against ration documents”.
A Two-Member Bench of the Authority comprising Sarthak Saxena, Joint Commissioner, CGST & CX and Joyjit Banik, Senior Joint Commissioner, SGST observed that “The applicant is not making any supply to the State Government. No tax is, therefore, to be charged to the State Government.”
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