Case Law Details
In re Baba Lokenath Flour Mills Private Limited (GST AAR West Bengal)
This article delves into the GST implications surrounding the composite supply of milling wheat into flour for public distribution. The key issue at hand is whether this supply qualifies for an exemption or is taxable under GST regulations. To determine this, the analysis considers aspects such as the classification of the supply as a composite supply, its relation to functions entrusted to Panchayats or Municipalities, and the value of goods within the supply.
Analysis: The analysis begins by examining whether the supply made by Baba Lokenath Flour Mills Private Limited can be regarded as a composite supply of goods and services. It further explores whether the supply is related to functions entrusted to Panchayats or Municipalities as per the Constitution. Additionally, the article evaluates whether the value of the goods in the supply exceeds the 25% threshold of the total value.
Based on the agreement between the applicant and the State Government, which involves crushing wheat into wholemeal atta, fortifying it with micro-nutrients, and packing it, it is determined that the activities qualify as a composite supply. The supply of services by way of milling is considered the principal supply.
To assess if the composite supply is related to functions entrusted to Panchayats, the relevant guidelines and circulars are examined. The agreement executed between the applicant and the State Government, in accordance with the guidelines, confirms that the supply is indeed in relation to a function entrusted to a Panchayat under the Constitution.
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