Case Law Details
In re Crown Beers India Private Limited (GST AAAR Maharashtra)
It is worth noting here that in erstwhile Service Tax regime also, the said activities of CBUs of manufacturing alcoholic liquor on behalf of Brand Owners (BOs) against a consideration, were subjected to Service Tax and this was clarified also by CBIC (earlier CBEC) vide Circular No. 249/1/2006-C.X.4 dt. 27.10.2008 and Circular No. 332/17/2009-TRU dt. 30.10.2009.This levy of Service Tax continued upto 30.06.2012. Thereafter, with effect from 01.07.2012, the activity of production of or process amounting to manufacture was covered under Section 66D (Negative List) implying that the activity undertaken by the CBU went out of purview of Service Tax. The statute was yet again amended and process undertaken by CBUs once again came under the purview of Service Tax with effect from 01.06.2015 and remained there till 30.06.2017. Therefore, it is observed that the activities of CBUs were subjected to Service Tax just prior to introduction of GST.
As regards the contention made in respect of the rate of GST that would be levied on the job working activities in respect of the manufacture of beer, we do not agree to the argument put forth by the Appellant wherein they submitted that all the activities under consideration i.e. brewing, bottling and supplying Products are in relation to beer which is classifiable under item 2203 00 00 of the First Schedule to the Customs Tariff Act, 1975 and hence liable to 5% GST (2.5% CGST +2.5 % SGST) in accordance with the entry 26(f) bearing Heading 9988 of the Notification 11/2017 dated 28.06.2017. There is no dispute about classification of Beer under heading 2203 but all the products classifiable under Chapter 1 to 22 do not attract 2.5% CGST under entry no. 26(f) of Notification no. 11/2017-C.T.(Rate) dt. 28.06.2017. Only food and food products of these chapters are eligible for this exemption. Now, it is to be seen whether alcoholic liquor for human consumption can be considered as food for the purpose of exemption under the said notification. There is no definition of food and food products under GST Acts. However, Hon’ble Supreme Court has discussed this issue in detail in the matter of Collector of Central Excise Vs Parle Exports (P) Ltd. reported in 1998(38) E.L.T.741(S.C.) and decided that non -alcoholic beverages were not eligible to exemption as food products. Everything consumed by human cannot be considered as food or food products for the purpose of exemption from GST. The context, spirit and reason of law need to be examined to extend exemption. . Hon’ble Supreme Court in the said judgment had opined that ” it cannot be contended that expensive items like Gold-Spot base, Limca-base or Thums up-base were intended to be given exemption at the cost of public exchequer.” Similarly, it would have never been the intention of law to exempt expensive item like ‘alcoholic liquor’ under the category of food and food products even though the same is for human consumption.
The Appellate Authority for Advance Ruling upheld the ruling given by the Advance Ruling Authority by observing that the ruling pronounced by the Advance Ruling Authority in as much as the activities performed by the PIL, on the goods of the Appellant, are in the nature of the Job work and accordingly attract 18% GST.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING,MAHARASHTRA
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