Activities relating to spectacles, frames & tagging of jewellery does not amount to manufacture– AAR

Brief Facts

M/s Amazon Seller Services Private Limited (hereinafter also referred to as applicant) is a private limited company incorporated in India under the Companies Act, 1956. Applicant provides an IT enabled / online platform to third party manufacturers / merchants to list and market their products; that this platform is offered on www.amazon.in for which a fee is charged to merchants for such online listing services; that for this purpose, as an additional service offering, the applicant has established a fulfillment center at the said warehouse(s) that receives, stores, packages and ship the products listed online for sale by the merchant to the customers purchasing the products; that the sale of goods will be directly by the merchants; that the applicant only operates as an IT enabled platform which enables the sale by listing the goods and by providing incidental services such as stocking the goods in its warehouse and undertaking activities such as assortment, packing and stickering prior to delivery of the goods to the merchant’s customer; that after completion of the above activities, the goods are stored in the applicant’s warehouse; that upon a merchant’s customer placing a purchase order on the merchant’s product through the applicant’s online platform, the goods are appropriately dispatched to the customer after performing the necessary activities. The applicant has already sought the advance ruling in respect of such activities undertaken by them at the warehouse(s) prior to delivery of the goods to the merchant’s customer and it was ruled that such activities do not amount to “manufacture” or “deemed manufacture” as per Section 2(f) of the Central Excise Act, 1944.

The applicant now proposes to offer additional activities to its clients (i.e., merchants) besides assortment, packing and stickering activities which were the subject matter of the earlier advance ruling. The additional activities would typically include activities such as inspection, cleaning, touching-up and re-stitching, etc on goods received by the applicant from the merchants in the warehouse(s) or on shipment of goods to the merchant’s customer or on customer returns for which the applicant may charge a separate consideration / fees; such consideration / fees would be subject to Service Tax. The proposed new activities on which the current ruling is being sought by the applicant would be undertaken at the said warehouse(s) and at other warehouses operated / to be operated by the applicant or third parties on its behalf or at a premises located outside the warehouse of the applicant wherein such premises is either owned, leased or is in the possession of the applicant under such other similar arrangement.

Submissions of Applicant

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