Appellate Orders

Appellate Authority has uphold the impugned ruing UP ADRG- 12/2022 dt. 23.09.2022 passed by the Authority for Advance ruling against the Appellant.

The processing undertaken by a person on the goods belonging to another registered person qualifies as job work even if it amounts to manufacture provided all the requirements under the CGST/MGST Act in this behalf, are met with. The transaction between the Appellant and M/s JSL does not qualify for Job Work under Section 2(68) and Section 143 of the said Acts.

(1) Activities under taken by the appellant are covered under composite supply of works contract as defined clause (119) of the Section 2 of the CGST Act, 2017.

 (2) The aforesaid activities shall be covered under Entry No 3(v) (a) of Notification No. 8/2017- Integrated Tax (Rate) dated 28.06.2017 and the benefit of concessional rate of 12% GST can be availed in respect of the said supply. However, the benefit of concessional rate of GST shall be restricted for the period prior to 18.07 2022 only ie the date of change in Notification and omission of entry 3(v) (a) of Notification No. 8/2017- Integrated Tax (Rate) dated 28.06.2017.

The Appellate Authority for Advance Ruling held that the services of supplying food by the appellant to the employees of the unit located in the Special Economic Zone is not covered under the zero rated supplies in terms of Section 16(1)(b) of the IGST Act, 2017 and the services of the appellant are also not in the nature of restaurant services in SEZ as claimed by the appellant.

We, hereby, partly set aside the MAAR Order No. GST-ARA-68/2019-20/B-52 dated 27.08.202 1 by holding that, in the facts and circumstances of the case, the other charges which are inextricably linked to services by way of construction of residential apartment /dwelling are part of a bundled service with principle service of construction of residential apartment /dwelling. The rate of tax applicable on such services would be 12% as applicable to the construction service. The other charges that don’t pass the muster of indicators of a bundled service are held as supply of independent services. They are to be taxed as per the respective SAC codes and rate of tax thereon. As per the submission of the appellant, he has collected 18% of GST on the supply of such services. In respect of services which are allowed as bundled services, the present decision implies an excess collection of tax. It is hereby directed that the Appellant to refund the excess tax collected to the customers. Thus, the appeal filed by the Appellant is, hereby, partly allowed.

We confirm and uphold the Advance Ruling bearing No. GST-ARA-30/2020-21/B-71 dated 31.05.2022 pronounced by the MAAR. Therefore, the Appeal filed by the Appellant is, hereby, dismissed

In respect of point (i) of Prayer to the grounds of Appeal, the Appellate Authority did not find any infirmity with the ruling given by Authority for Advance Ruling in this behalf for Question No. 1 posed before them.  In respect of point (ii) of Prayer to the grounds of Appeal, the appellate authority  held that the use or words  ‘VALUE’, ‘CHOICE’ or ‘ SUPERIOR’ on the proposed packing, without altering the surrounding environment to take advantage of brand  ‘MORE’, would be construed as ‘brand name’ for the purpose of Exemption Notification. 

We, hereby, modify the advance ruling pronounced by the MAAR, and hold as under in respect of the question no. (2), (3). (4) and (5): Question 2 - If the answer to Question I is Yes, what is the value on which GST has to be charged ie. whether it should be lease charges or the value of equipment in terms of Section 15 of the CGST Act and MGST Act read with relevant Rules?

Answer: The value declared in the invoice issued by the appellant would be the value on which GST has to be charged in terms of Section 15 of the CGST Act, 2017 read with second proviso to Rule28 of the CGST Rules, 2017. Question 3  What are the documents that should accompany the movement of the goods from CIPL Maharashtra to CIPL Karnataka?

 Answer: The aforesaid question cannot be answered as the same is not covered within the ambit of advance ruling in terms of section 97 of the CGST Act, 2017. Question 4  Whether movement of equipment from CIPL Karnataka to CIPL Tamil Nadu on the instruction of CIPL Maharashtra can be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act and MGST Act, and thereby not liable to GST?

Answer:  Movement of equipment from CIPL Karnataka to CIPL Tamil Nadu on the instruction of CIPL Maharashtra cannot be said to be mere movement of goods not amounting to a supply in terms of Section 7 of the CGST Act, 2017 as the said transaction would fall under the ambit of supply of services in terms of section 7 of the CGST Act, 2017. The said supply of services involved in the transaction under question is being provided by CIPL Karnataka to CIPL Maharashtra in the capacity of bailee of CIPL Maharashtra for which CIPL Karnataka is charging facilitation fee along with applicable GST from the Appellant, ie., CIPL Maharashtra as per the Inter-unit Memorandum of Understanding entered between the Appellant and other state units. It is further clarified here that the said movement of goods from CIPL Karnataka to CIPL Tamil Nadu as per the instruction received from CIPL Maharashtra, the owner of goods, will again be treated as supply of lease rental services by CIPL Maharashtra to CIPL Tamil Nadu as ruled by the MAAR. Question 5  With reference to Question 4 above, what are the documents that should accompany the movement of the goods from CIPL Karnataka to CIPL Tamil Nadu?

 Answer: The aforesaid question cannot be answered as the same is not covered within the ambit of advance ruling in terms of section 97 of the CGST Act, 2017

The Appellate Authority held that the accumulated credit by way of Krishi Kalyan Cess (KKC) as appeared in the Service tax return of Input Service Distributor (ISD) on June 30, 2017 which is carried forward in the electronic credit ledger maintained by the Appellant under CGST Act 2017, shall not be allowed to be taken as admissible input tax credit.  Accordingly the order of AAR stands confirmed in terms of the above order. 

The order passed by the lower authority is upheld. The subject appeal is disposed accordingly.