The West Bengal Authority for Advance Ruling (AAR) has held that the service of milling wheat into flour would be eligible for Goods and Service Tax (GST) exemption as the value of goods had exceeded 25% than the value of supply.
The applicant Somnath Flour Mills Private Limited is a flour miller. who had entered into an agreement with the State of West Bengal represented by the District Controller of Food & Supplies for conversion of wheat provided by the State Government and owned by the State Government, at all times, into atta/ fortified atta, for distribution by the State Government through Public Distribution System.
The applicant has sought advance ruling as to the value of supply of services provided by the applicant Company to the State Government and rate of tax applicable on the value of supply. Also, on what components to be included in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018- Central Tax.
Manish Raj Dhandharia on behalf of the applicant submitted that the services provided by the Applicant to the State Government would be liable to exemption from GST. He also submitted that value of goods involved in the instant composite supply was 23.03% of the total value of supply and had not exceeded 25% of the value of the composite supply.
The Authority for Advance Ruling of Brajesh Kumar Singh, (Joint Commissioner-CGST) and Joyjit Banik, (Senior Joint Commissioner-SGST) held that
“This composite supply of services by way of milling of wheat into flour (atta) to Food & Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the value of goods involved in such composite supply does not exceed 25% of the value of supply.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
