Case Law Details
In re Time Technoplast Limited (GST AAR Karnataka)
Whether they are liable for 0.1% concessional rate of tax under Notification No. 41/2017-IT (Rate) on supply of HDPE Drums for use by the manufacturer of Ethyl Alcohol in his factory for packing his manufactured goods and supply to merchant exporter?
The applicant supplies HDPE drums, alleged packing material, to a merchant exporter, on receipt of a purchase order, by raising invoice on the merchant exporter and delivers the subject material, under the instructions of the said merchant exporter, to the premises of the chemical manufacturer, who manufactures the ethyl alcohol which is packed in the HDPE drums and then exported by the merchant exporter. Thus, the applicant sought advance ruling in respect of the question mentioned at para 3 supra.
The applicant contested that their product HDPE drums are used for packing the ethyl alcohol which is exported by the merchant exporter and hence they are entitled to the concessional rate of 0.1%, in terms of Notification No.40/2017-Central Tax (Rate) dated 23.10.2017 or Notification No.41/2017-Integrated Tax (Rate) dated 23.10.2017.
The Notification supra stipulates certain conditions for supply of goods to the merchant exporter at concessional rate of GST at 0.1%. To avail the concessional rate of GST, the registered recipient is required to move the goods directly from the place of registered supplier to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported, or to a registered warehouse from where the goods shall be further moved to the Port, Inland Container Deport, Airport or Land Customs Station. In case the merchant exporter procures goods from different registered suppliers, the merchant exporter should move such supplies to the registered warehouse, aggregate such procured goods at the warehouse and should move the goods to the Port, Inland Container Depot, Airport or Land Customs Station from where the goods are exported. In the instant case, the applicant supplies HDPE drums by raising the invoice under Billed to Merchant Exporter and shipped to the manufacturer of the ethyl alcohol. Thus, the impugned goods are not moved directly to the Port, Inland Container Deport, Airport or Land Customs Station or to a registered warehouse, which is a pre-condition for availing concessional rate of GST. Therefore, the applicant is not entitled to supply the impugned goods at the concessional rate of GST at 0.1%.
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