Case Law Details

Case Name : In re Dipeet Agarwal (GST AAR West Bengal)
Appeal Number : Advance Ruling Order No.31/WBAAR/2019-20
Date of Judgement/Order : 11/11/2019
Related Assessment Year :
Courts : AAR West Bangal (110) Advance Rulings (1149)

In re Dipeet Agarwal (GST AAR West Bengal)

Supply of goods through PDS is not exempt under Notification No. 2/2017 – CT (Rate) dated 28/06/2017, as amended from time to time (reference to which includes reference to State Notification No. 1126 – FT dated 28/06/2017) or any other notification. Activities or transactions of the Applicant are not included in Schedule III either. The Applicant is, therefore, liable to pay GST at the applicable rate on his supplies of goods through PDS.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,WEST BENGAL

1. Admissibility of the Application

1.1 The Applicant supplies consumer goods like biscuits, soaps etc. earmarked ‘FOR PDS SUPPLY ONLY’ to fair price shops/PDS distributors. It seeks a ruling on whether he is liable to pay GST on such supplies of goods. The question raised by the Applicant is admissible for advance ruling under section 97 (e) of the GST Act.

1.5 The Applicant further submits that the question raised in the Application is neither decided by nor pending for decision before any authority under any provisions of the GST Act. The concerned officer from the Revenue does not object to the admission of the Application.

1.6 The Application is, therefore, admitted.

2. Submissions of the Applicant

2.1 The Applicant submits that he supplies consumer goods earmarked ‘FOR PDS SUPPLY ONLY’ to fair price shops/PDS distributors. In doing so he acts as an associate of the West Bengal Essential Commodities Supply Corporation Ltd (hereinafter the WBECSC Ltd) against payment of a monthly administrative charge at a rate fixed by the Government of West Bengal (hereinafter the Govt). The Applicant bears all cost and charges, including packaging, loading, railway freight, demurrage etc, and bears all the risk associated with transportation, warehousing and quality of the products.

2.2 The Applicant supplies the goods at the price and to the recipients fixed by the Govt. He is merely acting as the canalising agency on behalf of the Govt and the WBECSC Ltd, having no control over the pricing and the market share. He files copies of the relevant orders issued by the Govt and a copy of the agreement with the WBECSC Ltd.

2.3 The Applicant submits that his supplies of goods for distribution through PDS should be exempt from payment of the GST. However, he refers to no notification or legal provision under the GST in support of his argument.

3. Submissions of the Revenue

3.1 The concerned officer from the Revenue does not offer any comment on sustainability of the Applicant’s argument.

4. Observations & Findings of the Authority

4.1 Supply of goods through PDS is not exempt under Notification No. 2/2017 – CT (Rate) dated 28/06/2017, as amended from time to time (reference to which includes reference to State Notification No. 1126 – FT dated 28/06/2017) or any other notification. Activities or transactions of the Applicant are not included in Schedule III either. The Applicant is, therefore, liable to pay GST at the applicable rate on his supplies of goods through PDS.

Based on the above discussion, we rule as under,

RULING

The Applicant is liable to pay GST at the applicable rate on his supplies of goods through PDS.

This Ruling is valid subject to the provisions under Section 103 until and unless declared void under Section 104 (1) of the GST Act.

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