Appellate Orders

Partially modify the ruling passed by the Maharashtra Advance Ruling Authority Vide Order No GST-ARA-66/2018-19 B-162 dated 19.12.2018, and answer the questions, raised by the Appellant in their Appeal filed before us, as under:

1. Whether availment of common input supplies on behalf of other unit/units registered as distinct person and further allocation of the cost incurred for same to such other units qualifies as supply and attracts levy of GST?

Yes, availment of common input supplies from the third-party service vendors/suppliers on behalf of the Branch Offices/Units, registered as distinct persons will qualify as supply of services in accordance with the provision of Section 7(1)(a) of the CGST Act, 2017. However, the cost of the said common input services availed on behest of Branch Offices/Units and allocated to the Branch Offices/Units by the Head Office will not attract the levy of GST as the said costs have been incurred by the Head Office in the capacity of a pure agent of the Branch Offices/Units, and as such, the said cost incurred by the Head Office shall be excluded from the value of supply of the facilitation services.

2.If GST is leviable, whether assessable value can be determined by arriving at nominal value?

The assessable value of the services provided by the Head Office to the branch offices/units can be determined as per the the second proviso to clause(c )of  Rule 28 of the CGST Rules, 2017, which provides that value of the tax invoice will be deemed as the open market value of the services.

3. Once GST is levied and ITC thereof is availed by recipient unit, whether the Applicant is required to register itself distribution of ITC on common input supplies?

Since, the Head Office is not entitled to avail and utilize the credit of tax paid to the third-party service vendors for the common input services received by it on behalf of the Branch Offices/Units as the said common input services received by the Appellant's Head Office are being used or consumed by the Branch Offices/Units in the course or furtherance of their businesses, and not by the Head Office. Therefore, the Appellant is bound to take the ISD registration as mandated by section 24(viii) of the CGST Act, 2017, and comply with all the provisions made in this regard, if it intends to distribute the credit of tax paid on the common input services received by it, on behalf of the branch offices units, to the branch offices/units.

It was hold that the body building and mounting of body on the chassis of different models of Tippers, Tankers, Trucks and Trailers, on the chassis to be supplied by the Principal, on delivery challan, by collecting job work charges for such fabrication work is taxable @18%, in accordance with Circular No. 52/26/2018-GST dated 09-08-2018, subject to fulfillment of all the conditions prescribed in the Section 141 and 143 of the CGST Act, 2017 read with relevant Rules / Notifications.

The present appeal is rejected, as being non-maintainable as per the provision of law. 

(i) Input Credit attributable to the supply of de-oiled rice bran cake (exempted supply) is to be reversed by the appellant in terms of Section 17(2) of the CGST Act 2017; and

(ii) GST @ 18% is payable on supply of de-oiled mahua cake with consequently allowing of the input credit in terms of Section 16 of the CGST Act 2017.

Q 1- Whether amount recovered from the employees towards car parking charge payable to Shantiniketan properties private limited (building authorities), would be deemed as “Supply of Service” by the applicant to its employees?

Ans:- The question is answered in affirmative.

Q2- If the first question is answered in affirmative, whether the value of aforesaid supply would be NIL, being provided in the capacity of a “Pure Agent”? If valuation is not accepted as NIL, what would be the value of such supply?

Ans:- Value of the Supply would be nil, subject to the fulfillment of the conditions prescribed for pure agent by the appellant.

Q3- If GST is payable on the such amount recovered from the employees, whether the GST paid by the applicant to building authorities towards car parking charges would be admissible as input tax credit against supply of car parking services to employees?

Ans:- As the second question is answered in negative hence the question becomes redundant.

In view of difference of opinion between the Members of Appellate Authority for Advance Ruling for Goods and Services Tad, Uttar Pradesh, no ruling can be issued on the questions raised by the appellant, in terms of provisions of Sub section 3 of Section 101 of CGST Act, 2017. Thus the Advance Ruling issued vide Order No. 37 dated 05-08-2019, by the Authority for Advance Ruling, Uttar Pradesh, is deemed to be not in operation.

The Advance ruling Order No. 32 dated 30 June 2019, passed by the Authority on Advance Ruling is just and proper and no interference is required in the said ruling.

The appeal of the Appellant i.e. M/s Amar Food Products, 14/310,Madan Mohan gate, Agra is disposed accordingly.

In view of the foregoing discussions and findings we hereby uphold the Ruling in Order No. 25 dated 20-02-2019 of the Authority for advance ruling that “Odomos is well covered under chapter 38 of Customs Tariff Act and is classified under HSN 38089191”.

Goods under reference are classifiable under S. No. 13 of Schedule II of Notification 1/2017 Central Tax (Rate), vide Heading 0406  and taxable @ 12% GST (6% CGST+6%SGST).

Modify the Ruling No.18 dated 14.12.2018 of the Authority on Advance Ruling to the extent that Applicant is not liable to pay GST on the delayed payment charges on reimbursement of amount by client to Applicant, where client failed to pay amount paid to Stock Exchange for purchase of securities with T+1 (trading day plus one day) under SEBI Regulation norms and deducted by Stock Exchange from Applicant account being purchase consideration of securities which are neither goods nor services under GST."