The West Bengal Authority for Advance Ruling ( AAR ) held in a recent ruling that the question raised by the Applicant for advance ruling is not encompassed under the ambit of Section 97(2) of the Central Goods and Services Tax Act, 2017 ( CGST Act ) or the West Bengal Goods and Services Tax Act, 2017 ( WBGST Act ) and proceeded to reject the same.
The Application for Advance Ruling was filed by AKS Expo Chem Pvt. Ltd. ( AKS ), a producer of bulk explosives operating under the brand name BENGEL PLUS with a manufacturing Unit in West Bengal and Silo Unit in Jharkhand.
The Future of Tax and Finance: Upskill with Us
AKS is involved in the supply of their products to Government Public Undertakings and their subsidiaries on the basis of a running contract that outlines comprehensive guidelines, terms and conditions for supply among other key details including quantity and quality of items, billing and payment terms.
The Applicant is required to supply the items as requisitioned by their clients on a day-to-day basis depending on the amount of explosives required for the blasting of mines.
The Applicant is often provided with approximate quantities of firepower required as the blast holes are predominantly drilled in during the night, while the orders are placed with the Applicant some time during the day; the leftover goods following the blasting are returned to the factory of the Applicant.
The Future of Tax and Finance: Upskill with Us
The explosives manufactured by the Applicant, being in a thick liquid state require a specialized vehicle for their transport and are accompanied by an outward e-way bill and delivery challan containing the information regarding the conveyance.
AKS deemed the services rendered by them to the Government undertakings as a “continuous supply of goods” as per Section 2 (32) of the GST Acts and was of the view that the service could be classified under Rule 55 of the CGST Rules, 2017 and WBGST Rules, 2017 thereby permitting the consignor to issue a delivery challan in case of supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known.
In light of the Applicant’s claim, the Applicant sought to discern whether they could issue the invoices after the actual consumption of the goods ( Explosives ) as per Section 31(4) of the GST Acts.
The Future of Tax and Finance: Upskill with Us
The two-member Bench of AAR comprising Dr Tanisha Dutta, Joint Commissioner, CGST & CX Joyjit Banik, Additional Commissioner, SGST observed that the Application for Advance Ruling was filed by the Applicant under the provisions of Section 97, GST Acts; Clause 2 of Section 97 of the GST Acts itemizes the questions on which an advance ruling can be sought for by an Applicant.
The Authority rejected the query of applicability of any notification issued by the Government under the provisions of the GST Acts citing the lack of scope of Section 97(2) of the GST Acts to accommodate the Applicant’s query.
In light of the observations made, the Application was rejected by the AAR.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
