Case Law Details
In re M/s. Kohinoor Woods (GST AAR Karnataka)
In this case, instead of Forestry Department taking the responsibility of cutting the trees it directed the applicant to cut and remove the standing live Tree. Thus applicant is ultimately removing the cut log and not the live trees, Here the job of cutting is undertaken by the applicant instead of Social Forestry Department that does not mean that the Department supplying standing live trees and further Department has directed the applicant to cut and remove the trees. The applicant is not allowed to leave the live trees intact in the area and hence is bound to cut and remove the wood from the area. What is appropriated by the applicant is the timber logs and not live trees as the contract is clearly mandating that the goods are to be cut and then appropriated to the contract. The Applicant is finally removing cut logs from that allotted area and not the live trees.
Further, it is a composite contract of cutting of live trees to obtain the logs and transfer of the timber logs, with transfer of timber logs being the principal supply in the composite supply. By virtue of section 8 of the CGST Act, the entire supply would be deemed to be the supply of the principal supply i.e. supply of timber, which is covered under HSN 4403 and under the entry no. 134 of Schedule III of the Notification No: 1/2017- Central Tax (Rate) dated 28/06/2017 and hence chargeable to tax 9%. Similarly the same is taxable under KGST Act at 9%.
The transaction of the applicant removing the rough wood after cutting the trees and appropriating the wood logs under contract is covered under entry no. 134 of Schedule 111 of the Notification No: 1/2017- Central Tax (Rate) dated 28/06/2017 and hence chargeable to tax @ 9%. Similarly the same is taxable under KGST Act at 9%.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,KARNATAKA
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