III. AUTHORITY
OF ADVANCE RULING (AAR AND AAAR)
25. [2020 (5) TMI 603] M/s Homeable Constructions and Estates Private Limited [AAR, Karnataka] Date of order: 20th May, 2020
National
Centre for Biological Sciences (NCBS) is not a government entity and therefore
GST is leviable @ 18% on works contract services provided to it
FACTS
The applicant had entered
into a works contract agreement with the National Centre for Biological
Sciences (NCBS) for construction of a hostel building. The Council
administering the institute had only four members appointed by the government.
As per Notification No. 24/2017-CT(R) dated 21st September, 2017,
the GST rate for composite supply of works contract service is 18% and in case
such services are provided to Central Government, State Government, Union
Territory, a local authority, a Government Authority or a Government Entity,
the GST rate is 12%. The question was about GST rate for works contract service
provided by the applicant to NCBS.
HELD
It was held that NCBS was not
a government entity as it was not an authority set up by Parliament or State
Legislature and government did not have 90% participation. Further, the service
procured by NCBS was not in relation to work entrusted by government in view of
clause (vi) of Notification No. 11/2017 – Central Tax (Rate) dated 28th
June, 2017. Thus, works contract service provided by the applicant was held to
be liable to 9% CGST and 9% KGST vide serial No. 3(xii) of Notification
No. 11/2017-CT (Rate) dated 28th June, 2017.
26. [2020 (5) TMI 581] LSquare Eco Products Pvt. Ltd. [AAR, Karnataka] Date of order: 20th May, 2020
Kraft paper
honeycomb board is classified under HSN Code 4808 90 00
FACTS
The applicant was a
manufacturer of kraft paper honeycomb board which by structure is similar to
corrugated paper board classified under HSN Code 48081000. Such paper honeycomb
board consists of 80 to 90% of kraft paper and the rest is paper to paper
adhesive which is used in primary packing of goods as a cushioning material,
separators or edge protector, for making shipping cartons of goods and as
pallets and pallet boxes. Advance ruling was sought on the HSN code of kraft
paper-made honeycomb boards as HSN Code 48081000 read as ‘corrugated paper and
paper board, whether or not perforated’ which did not specifically mention
‘paper honeycomb board’.
HELD
Considering the submissions
made by the applicant, the Authority verified the structure and purpose for
which kraft paper honeycomb board or paper honeycomb board was used and held
that these were similar to corrugated paper board classified under 48081000.
The only difference was that paper honeycomb board consisted of honeycomb-like
structure core material at the centre and on either side of this one or more
layer of kraft paper was glued by using adhesive with fluting, direction being
perpendicular to corrugated boards. Hence, honeycomb paper board was held to be
classified under HSN code 48089000, i.e., under the category ‘other’.
27. [2020 (5) TMI 602] Mahalakshmi Mahila Sangha [AAR, Karnataka] Date of order: 21st May, 2020
TDS u/s 51
is not applicable to supply of exempt services
FACTS
The applicant was engaged in
providing catering services to educational institutions as per Sarva Shikshana
Abhiyana e-tendering sponsored by state / Central / Union Territory. The claim
of the applicant was that the service provided by it was exempt vide
entry No. 66 of Exemption Notification No. 12/2017-CT(R) dated 28th
June, 2017 and therefore sought advance ruling on liability to deduct tax.
HELD
The Advance Ruling Authority
held that the statutory provision of tax deduction at source u/s 51 of the CGST
Act is applicable on the payment made to a supplier of taxable services. Since
it was a case of exempt services, the amount received was held as not liable to
tax deduction at source.
28. [2020-TIOL-112-AAR-GST] Penna Cement Industries Limited [Telangana State Authority] Date of order: 2nd March, 2020
In case of
ex-factory sales, though the sale terminates at the factory gate, but if the
goods are taken by the recipient to another state, it is an inter-state sale
liable for IGST
FACTS
The applicant is a
manufacturer of cement. It occasionally undertakes inter-state sale on
ex-factory basis. When it makes an ex-factory sale, delivery terminates at its
factory gate but the further movement is carried on by the recipient or
transporter of goods up to the billing address state. The question before the
Authority is whether it should charge IGST in respect of such supplies.
HELD
The Authority noted that IGST
is chargeable on ex-factory inter-state supplies since the goods are made
available by the supplier to the recipient at the factory gate. However, this
is not the point where the movement terminates since the recipient subsequently
assumes the charge for transportation of goods up to the destination in another
state where the goods are destined. This is the place of supply in terms of
section 10(1)(a) of the IGST Act. Thus, since the location of the supplier and
the place of supply fall under different states, the supply qualifies as an
inter-state supply liable for IGST.
29. [2020-TIOL-111-AAR-GST] M/s Sri Venkateshwara Agencies [Telangana State Authority] Date of order: 2nd March, 2020
Supply of ice-cream with or without service activities in the premises
is covered by Notification 11/2017-Central Tax (Rate). Ice-cream supplied in
bulk quantity to caterers / push-cart vendors is a supply of goods since there
is no element of service
FACTS
The applicant is a
distributor of Scoops brand ice-cream and ice-cream products are supplied by it
to sub-distributors, hotels, for party orders and to retail outlets. The
question before the Authority is the taxability of ice-cream and allied
products, milk shakes served in the parlour with or without adding any
ingredients like fruits or topping sauces; sold in the parlour as such, i.e.,
in cups, cones, bars, sticks, novelties, 1/2 litre packs, party packs and bulk
packs, etc.; party orders, i.e., sale of bulk ice-cream to caterers as
take-away; serving of ice-cream with ingredients like fruits or toppings as per
guests’ requirements or taste; ice-cream products in cups, cones, bars, sticks,
novelties, etc., sold to push-cart vendors who in turn sell it to their
customers.
HELD
The Authority noted that an
ice-cream parlour would fall within the term ‘eating joint’ and supply of
ice-cream along with or without service activities would fall within the
definition of restaurant service, attracting GST @ 5% as per serial No. 7(ii)
of Notification 11/2017-Central Tax (Rate) without Input Tax Credit. Sale of
bulk ice-creams to caterers as take-away (party orders) does not involve any
service and, therefore, is to be reckoned as supply of goods, hence 11/2017 is
not applicable. Further, supply / serving of ice-creams with ingredients like
fruits or toppings as per guest requirements at customers’ premises is covered
by Notification 11/2017 and attracts GST @ 5%. Ice-cream and allied products
sold to push-cart vendors do not involve any element of service, hence 11/2017
is inapplicable.
