Article contains synopsis of 18 recent advance rulings under GST pronounced by Advance Ruling Authorities of Various States
‘Advance ruling’ means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
An advance ruling helps the applicant in planning his activities, which are liable for payment of GST, well in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities.
So, i hope the following advance rulings could help you in cases you currently deal or may deal later. Happy leaning!
| SR. | SUBJECT | PARTICULARS OF CASE | RULING |
| 1. | M/s. Equitron Medica Private Limited (GST AAR Maharashtra) | Applicant is engaged in the manufacturer of laboratory medical equipment. It supplies goods through distributors network and issues invoices leving GST @ 18% because the distributor is not engaged in scientific research of any type. End user includes institutions engaged in scientific research. | Ruling: Concessional rate of 5% is applicable via GST notification 45/2017 & 47/2017 on supply to the end-users who undertake/are engaged in the scientific research and the goods supplied are used for the same purpose. The applicant does not supply goods to the end-users who undertake or are engaged in the scientific research. The goods are supplied to their distributors only. Hence applicant shall continue to charge 18% gst. |
| 2. | M/s. Life Health Foods India Pvt Ltd (Maharashtra Authority for Advance Rulings) | Whether “almond milk” sold by the applicant is covered under entry 48 of schedule II of the Notification No. 1/2017-IGST(Rate) dated 28th June, 2017 and attracts Goods and Service tax of 12%? | Rejected. Not maintainable.
My opinion: As per CBIC clarification on 11/10/2019, Almond Milk is made by pulverizing almonds in a blender with water and is then strained. As such almond milk neither constitutes any fruit pulp or fruit juice. Therefore, it is not classifiable under tariff item 2202 99 20. Almond milk is classified under the residual entry in the tariff item 2202 99 90 and attract GST rate of 18%. |
| 3. | M/s. Chowgule Industries Pvt Ltd (Maharashtra Authority for Advance Rulings) | Whether the applicant is entitled to avail ITC charged on inward supply of motor vehicle which are used for demonstration purpose in the course of business of supply of motor vehicle as ITC on capital goods and whether the same can be utilised for payment of output tax payable under this Act? | Answered in the affirmative.
Synopsis:
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| 4. | M/s. Joyville Shapoorji Housing Pvt Ltd (Maharashtra Authority for Advance Rulings) | Question 1. Whether the Applicant being the Contractor at Joyville, Virar will be eligible for concessional rate of GST under Entry (v) (da) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended by Notification No.01/2018-CT (Rate) with effect from 25.01.2018 and discharge Goods and Services Tax at the rate of 12%?
Question 2. Whether the building completion and finishing services be regarded as a separate service or would it be a composite supply of works contract service as covered under entry (v) (da) of Notification No. 11/2017 to avail the benefit of reduced rate of tax? Question 3. What would be the appropriate rate of GST on works contract services provided for the construction of the units and common areas and amenities on pro-rata basis which do not qualify the criteria of low cost houses’? |
Answer 1: Yes. The applicant will be eligible for concessional rate of Goods and Service under Entry (v) (da) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended by Notification No.01/2018-CT (Rate) with effect from 25.01.2018 and discharge GST at the rate of 12%, in respect of Affordable Housing only, as discussed above.
Answer 2: Building completion and finishing services will not be regarded as a separate service. Such building completion and finishing services will be a part of composite supply of works contract services with the principal supply of building construction, covered under entry (v)(da) of Notification No. 11/2017 and eligible to avail the benefit of reduced rate of tax @12% GST only in respect of dwelling units having an area of less than 60 sq mtrs. Answer 3: The rate of GST will be 18% on works contract services provided for the construction of the units, common areas and amenities on pro-rata basis which do not qualify the criteria of low cost houses. |
| 5 | Sevak Ram Sahu (M/s. S.R.S. Enterprises) (GST AAR Rajasthan) | Party A entered in to an agreement with Rajasthan Government for construction of 270 flats under affordable housing scheme under Pradhan Mantri Awas Yojana (including material and labour). Party A further sublets the work to party B. Party B further entered in a sub-contract with the “applicant” for “Pure labour Service” in said project. These labour services will be used for “Chunai and Plaster Work only” in the above said project. The applicant will have all the control over labour and responsible for their dues and other concerns.
Whether the entry number 10 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 is applicable to the applicant and accordingly will the services provided by the applicant? |
The services provided by way of pure labour contract supplied by the applicant for the construction of flats under Pradhan Mantri Awas Yojana (PMAY) is covered under Entry 10 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended).
Thus on a conclusion, the services are exempted from GST. |
| 6 | JVS Foods Pvt Ltd (GST AAR Rajasthan) | Whether the goods (Fortified Rice Kernel) manufactured and sold by the applicant will be fall under Chapter-10, Tariff item 1006 as Rice and description of goods 10061090 others (IGST Nil/5%, CGST Nil/2.5%, SGST Nil/2.5%)? | AAR held that Fortified Rice Kernels FRK manufactured and supplied by the applicant is classifiable under HSN 19049090 and attracts GST @ 18% (SGST 9 % + CGST 9 %). |
| 7 | Geetastar Resorts Pvt. Ltd. (GST AAR Rajasthan) | Whether Input Tax Credit on goods and services used in construction of hotel will be available to the applicant engaged in providing taxable services of hotel accommodation and related services? | Withdrawn.
Input tax credit of input and input services used in construction of hotel for which output supply is taxable will not be available in reference to Section 17(5)(d) of GST Act, 2017. |
| 8 | Crown Tours and Travels (GST AAR Rajasthan) | Applicant receives service orders from the main tour operator to provide a range of services to the passenger/ tourist. There is a contractual understanding between the tourist and the main tour operator to provide a complete packaged tour. In turn the main tour operator engages the Applicant to provide one or more of the following services
Whether the ‘Ancillary Services’ provided to various tour operators falls under Chapter heading 9985 (i) {Supply of Tour Operator Service} or 9985 (iii) {Support Services}? |
The ‘Ancillary Services’ provided by the applicant to various tour operators falls under Chapter heading 9985 (iii) {Support Services} of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 (as amended).
The applicable rate of GST for ancillary services provided by the applicant to various tour operators is 18% (SGST 9% + CGST 9%). |
| 9 | Alisha Foods (GST AAR Madhya Pradesh) | What is the correct classification of Fried Fryums of different shapes, sizes and varieties which are ready to eat and What is the HSN Code and GST rate applicable on such goods manufactured | The product ‘Fried Fryums’ manufactured and supplied by M/s. M/s ALISHA FOODS (23ABBFA7513N1ZI) is classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975.
Goods and Service Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) |
| 10 | V K Enterprises (GST AAR Uttarakhand) | what is the classification of goods (Rubber pad) if supplied in semi-finished condition to any person other than railways?
what will be the applicable rate of GST on Rubber pad in semi-finished condition supplied by the applicant? |
Rubber Pad falls Under Chapter 4016 of the GST Tariff Act 2017.
IGST @ 18% as on date is applicable on “Rubber Pad”. |
| 11. | S.P. Singla Constructions Pvt. Ltd. (GST AAR Punjab) | What is the classification of the ‘Works Contract’ services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a subcontractor to the Contractors who have been awarded the construction contract pertaining to construction / widening of roads by the Government Entities such as National Highway Authority of India. | The services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a sub-contractor in respect of construction contract pertaining to construction / widening of road by the National Highway Authority of India falls under the scope of Serial No. 3(iv) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended) and attracts GST @ 12%. |
| 12. | Pushpa Rani Pabbi (GST AAR Punjab) | Whether the parking lot services provided by the Contractor appointed by the Market Committee, which is a Government Authority is exempt under Notification No.12/2017 as the parking lot activity is covered under Article 243 of the Constitution. | The parking services provided by the Contractor appointed by the Market Committee, are not exempt under Notification No. 12/2017 as the Market Committee is not a Government Authority. Marketing Committee (Mandi Board) does not qualify under the definition as provided in clause 2(zf) of the notes appended to Notification No.12/2017. The activity / services of parking provided by the applicant falls under heading 9967 and attracts GST @ 18% |
| 13. | LAS PALMAS Co-operative Housing Society Limited (GST AAR Maharashtra) | Whether Co-operative Housing Society paying GST on maintenance charges collected from its members shall be entitled to claim ITC of GST paid on replacement of existing lift or elevator at its own premises? | Ruling: Lift which will be installed and commissioned in the building shall become an integral and permanent part of the immovable property. Referring to section 17(5)(d) regarding blocked credit, ITC shall not be available wrt construction of immovable property (other than plant and machinery). P&M excludes land and building. Hence concluding that ITC of lift is ineligible. |
| 14. | M/s. NRB Hydraulics Pvt Ltd. (Maharashtra Authority for Advance Rulings) | The applicant gives subcontract to vendor to manufacture goods. It is mainly a labour job. Payment of subcontracting is done by giving cash and giving away the scrap generating to vendor himself. Vendor is free to recover money by selling off the scrap. Question of applicant is who will pay GST on the scrap generated at vendor’s premises? | Rejected. Not maintainable.
My opinion: As the transaction derives a taste of barter transaction and as per section 7, barter is considered as supply. Hence both applicant (at the time of giving away of scrap as payment) and vendor (at the time of selling of scrap) has to pay GST. |
| 15. | Rishab Industries (GST AAR Maharashtra) | Whether transformers that are supplied to the indian railways are classified as “parts of railway or tramway locomotives or rolling stock- HSN 8607” and therefore subjected to GST @ 5% or transformers shall be categorized under HSN 8504 “electrical transformers, static converters and inductors” and therefore subjected to GST 18%? | Ruling: “Transformers” supplied to indian railways by the applicant are covered under HSN 8504 and Sr. No. 375 of schedule III of the Notification 1/2017 Central Tax (Rate) dated 28.06.2017 and therefore subjected to GST @ 18%. Hence applicant shall continue to charge 18% gst. |
| 16. | Kutting Fusion Hospitality LLP (GST AAR Maharashtra) | The cheaters a restaurant operated by the applicant located as part of retail arcade which is owned by M/s chalet hotel limited. M/s chalet hotel limited operates a hotel under brand name JW Marriott on the same plot as the arcade. What would be the rate of tax applicable to the applicant?
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Ruling: As per the contention of the applicant mostly the services are provided to the customers of hotel paying tariff of 7500 and above per unit per day. Notification No. 11/2017- CT(R) as amended states supply of food or drink in a restaurant for consumption…… where the restaurant is located in premises of hotel…… with a tariff of 7500 and above per unit per day…. Applicable rate of GST shall be 18%. |
| 17. | Vilas Chandanmal Gandhi (GST AAR Maharashtra) | Whether GST is leviable on sale of TDR / FSI received as consideration for surrendering the joint right in land in terms of development control regulations and granted in light of the article of agreement dated 18 12 2017 entered between the applicant and pune municipal corporation read with development control regulations? | Ruling: Yes, GST is applicable and classified under heading 9972 and the applicable rate of gst is 18%. |
| 18. | SAKSHI JHAJHARIA (GST AAR WB) | The Government will send to the Applicant the whole, unpolished food grain for processing. The Applicant will return the grain after crushing. Also the applicant will then pack the material according to the requirement of applicant in the packing material of the applicant itself. | Ruling: It is a composite supply. Principal supply – service of crushing. Bundled with it – packing material supply.
It will be an activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution, and its supply to State Government should be exempt under Sl No. 3A of Exemption Notfn. provided the proportion of the packing materials in the composite supply in value terms does not exceed 25%. |
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