Appellate Orders

The MAAAR held as under:                      

Question: 1) Being a part of the Ministry of Defence, Government of India, whether our organization Ordnance Factory Bhandara is liable to pay GST on the following supply of services: -
a) Liquidated damages deducted from the payments to be made to suppliers in case of delayed delivery of goods or services.
b) Amount of Security deposit forfeited of suppliers due to non-fulfillment of certain contract conditions.
(d) Food and beverages supplied at industrial canteen inside the factory premises.
(e)Community hall (Multipurpose Hall) provided on rental basis to employees of our organization.
(f) School bus facility provided to children of the employees.
(g)Conducting exams for various vacancies.
Answer: The Appellant is not liable to pay GST in any of these abovementioned activities/transactions carried out by them.
 Question: 2) Whether Input Tax Credit on expenditure on the goods and services consumed   by our organization in following activities shall be available: -
a) Maintenance of garden inside the factory premises.
b) Maintenance and upkeep activities relating to gardens, parks, playground, factory school for children of employees, hall for recreational activities, residential quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the factory premises but within the factory estate.
c) Medicines purchased by the hospital maintained by our organization and used for treatment of factory employees and their dependents. Expenditure on maintenance, upkeep and other activities relating to such hospital.
d) Expenditure related to maintenance and upkeep of guest houses maintained by organization.
e) Expenditure related to purchase of LPG cylinders used within industrial canteen.
Answer: ITC in respect of the following input services are available to the Appellant:
(a)  Maintenance of garden inside the factory premises;
(c)  Medicines purchased by the hospital maintained by our organization and used for treatment of factory employees and their dependents. Expenditure on maintenance, upkeep and other activities relating to such hospital. 
ITC in respect of the following input services are not available to the Appellant:
(b) Maintenance and upkeep activities relating to gardens, parks, playground, factory school for children of employees, hall for recreational activities, residential quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the factory premises but within the factory estate.
(d)  Expenditure related to maintenance and upkeep of guest houses maintained by organization.
(e) Expenditure related to purchase of LPG cylinders used within industrial canteen.

The Maharashtra AAAR held that the proposed arrangement of supply of coal or any other inputs by the principal i.e. JSL to the Appellant i.e. JEL for generation of electricity would be construed as job work. Accordingly, no GST will be leviable on this supply. Further, the supply of power by JEL to JSL, being an exempt supply, will attract nil rate of GST. Finally, the job work charges payable to JEL by JSL will be subjected to GST in terms of the provisions laid down in Notification No.11/2017-C.T. (Rate) dated 28.06.2017 as amended by various subsequent notifications.

The Maharashtra AAAR held that the Appellant was eligible to take benefit of rule 32(5) for the products in TABLE 1 placed by them before us except items placed at 7 & 8.  They furhter held that they cannot give any ruling on items 7 & 8 and they agreed with the observations of the AAR on 7 & 8, that in absence of any specific description of the products contained in them, no ruling can be given.

The Maharashtra AAAR held that since the questions asked by the Appellant were not covered under the jurisdiction of the advance ruling, therefore, no ruling could be passed in the instant case.

The Maharashtra AAAR  amended the para 19 of the original AAAR Order No.  MAH/AAAR/SS-RJ/32/2018-19 dated 23.04.2019 in as much as the membership fee, collected by the Respondent from its members, will not construed as consideration for levy of GST; rather it is the registration fee, collected by the Respondent from its members for organizing the skill oriented workshops, will be construed as consideration against the supply made by the Respondent to its members, and accordingly will be leviable to GST, while maintaining that Lions Club of Poona Kothrud, on account of the activities i.e. organizing training programs/workshops for its members, is liable to  take registration for discharging their GST liability.

The Maharashtra AAAR allowed the Appeal filed by the Department and declared the order passed by the Maharashtra ARA void ab-initio as it was vitiated by the process of suppression of material facts. The Maharashtra AAAR in its order dated 09.09.2019.

The Maharashtra AAAR upheld  the ruling pronounced by the Advance Ruling Authority by observing that any supply of works contract pertaining to the railways including monorail and metro is subject to concessional rate of 12% GST. In the instant case, though the respondent i.e. M/s. Shree Construction is providing works contract services to its main contractor who has entered into works contract agreement with railways, the composite supply of works contract being carried out by M/s. Shree Construction is ultimately going to the use of railways without being subjected to any change or modification, thus the said works contracts, though undertaken by the subcontractor, is undoubtedly pertaining to the railways and no one else’s. thus, the condition specified under item (v) of the Sr. 3 of the said notification is completely fulfilled, therefore the services provided by the sub-contractor would attract concessional rate of 12% GST. 

The Maharashtra AAAR upheld the order of Maharashtra Authority for Advance Ruling by stating that the PVC floor Mat would fall in the Customs Tariff heading 3918 and applicable rate of GST would be 18%(9% each of CGST and SGST). However, this order is restricted to the types of PVC floor coverings/Mats being manufactured by the Appellant as per the manufacturing process submitted and whose sample was produced before us. 

The Authority dismissed the appeal and upheld the Advance Ruling dated 22.11.2018 as the same does not suffer from any infirmity or illegality.

The Authority upheld the order passed by Advance Ruling Authority.