Pure services provided to Central Government, State Government etc. - Chapter 99 - Exemption - All India Institute of Medical Sciences, Bibinagar, was purchasing pure services such as manpower supply, security services and accountancy services paying GST at rate of 18% on services supplied - They claimed that being an educational institution their output service was exempt and therefore, they were reversing input tax credit - They submitted that their institution is ‘Central Government’ and hence supplies made to institution were exempt under Notification No. 12/2017-C.T. (Rate), dated 28-6-2017 - HELD : From documentary evidence submitted by applicant it was clear that applicant was not ‘Central Government’ but a ‘Governmental Authority’ as it was established by Government by an Act of Parliament - Sl. Nos. 3 & 3A of Notification No. 12/2017-C.T. (Rate), dated 28-6-2017 as amended with effect from 1-1-2022 had omitted phrase ‘Governmental Authority’ from description of services - Therefore, applicant was not eligible for exemption under above two serial numbers - Section 11 of Central Goods and Services Tax Act, 2017 - Section 11 of Telangana Goods and Services Tax Act, 2017.…

In re: ALL INDIA INSTITUTE OF MEDICAL SCIENCES

Teicoplanin and Caspofungin - Drugs & Medicines - Chapter 30 - Classification - Applicant-assessee is a manufacturer of parental dosage forms i.e. , Drugs & Medicines - Assessee, a pharmaceutical company sought application for advance ruling on tax liability of products i.e. teicoplanin and caspofungin - HELD : Said products are taxable at 5% GST as per Sl. No. 180 of Schedule 1 of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 - Further said commodity name is enumerated in list appended to lists appended to said Schedule - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Telangana Goods and Services Tax Act, 2017. [paras 7 and 8]

In re: STANEX DRUGS & CHEMICALS PVT. LTD.

Supply - Canteen services to employees - Applicant-assessee employ more than 250 employees who have been provided with canteen facility in terms of Section 46 of Factories Act, 1948 - Assessee provide canteen facility to their employees and bears 70% of cost and rest is borne by said permanent employees - HELD : In terms of C.B.I. & C. Circular No. 172/04/2022-GST, prerequisites provided by employer to employee in terms of contractual agreement between employer and employee will not be subjected to GST - Thus, deductions made by assessee from employees who are availing food in factory would not be considered as supply in terms of Section 7 of CGST Act, 2017 - Therefore, in instant case GST is not liable to be discharged on portion of amount recovered by assessee from it’s permanent employees towards canteen facilities provided to them - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Gujarat Goods and Services Tax Act, 2017. [paras 22 and 23] Supply - Canteen services to contract workers - Applicant-assessee employ more than 250 employees who have been provided with canteen facility in terms of Section 46 of Factories Act, 1948 - Assessee provides canteen…

In re: SUZUKI MOTOR GUJARAT PVT. LTD.

Hiring of electrical equipment, air-conditioning system, sprinkler system comprising fire detectors, DG set with accessories - Leasing or rental services - Without operator - Heading 9973 - Classification Mixed supply - Applicant enters into an agreement with TCG Urban Infrastructure Holdings Pvt. Ltd. to avail facilities, hiring of electrical equipment, air-conditioning system, sprinkler system comprising fire detectors, DG set with accessories and services installed in building to provide required facilities and services through such assets to sub-leased space acquired by applicant in such building - Applicants have no control/title over said fit outs and assets, but had right to use facilities and services on payment of agreed rate as hire charges - Tax is charged at rate of 28% by TCGUIH declaring same under SAC 9973 14, however, applicant contended that instant supply of services would attract tax at rate of 18% - HELD : Applicant receives multiple supplies for a single price and to qualify such supplies to be a composite supply, there must be only one principal supply - However, from agreement between applicant and TCGUIH, no such predominant element, as defined under clause…

In re: SUN KNOWLEDGE PVT. LTD.

Input Tax Credit - Apportionment of credit and blocked credits - Non-availability of ITC - Construction of immovable property - Respondent-company had constructed a warehouse and had let it out to another company - On respondent’s application for advance ruling, WBAAR held that applicant was not eligible for credit of input tax charged on inward supply of goods and services related to construction of warehouse which was capitalized in books of account, however, where construction expenses were not capitalized in books, claim of ITC was admissible - HELD : Provisions of clauses (c) and (d) to sub-section (5) of Section 17 of GST Act, 2017 clearly states that Input Tax Credit (ITC) is not available in respect of works contract services or goods or services or both received for construction of an immovable property and thus it will be a blocked credit - ITC for such portion of expenses pertaining to re­construction, renovation, additions, alterations or repairs which are capitalized stands ineligible - Issue of ‘capitalization’ is applicable only in Explanation part to clauses (c) and (d) to sub-section (5) of Section 17 ibid i.e., only when reconstruction, renovation, additions,…

In re: MINDRILL SYSTEMS AND SOLUTIONS PVT. LTD.

Appeals to Appellate Authority - Advance Ruling - Condonation of delay - Appellant-assessee are manufacturers of seat covers for two wheeler, bikes and scooters - Being aggrieved by AAR decision appellant had filed instant appeal - Appellant has filed appeal beyond prescribed time limit of 30 days due to fact that managing director of company, who is a heart patient, was advised to be in rest for 3 weeks and therefore relevant documents could not be handed over to consultant on time - HELD : From documents furnished by assessee relating to medical condition of MD, it is seen that he was admitted to hospital, underwent CABG surgery and was under medication therefore - As per medical certificate, said MD was advised to take rest for three weeks as he had chest pain - In view of documents available on record and as per medical condition of MD appellant has presented sufficient cause that prevented them from filing appeal within normal period - Therefore, delay of 21 days beyond normal time limit in filing appeal is condonable as provided under proviso to Section 100(2) of CGST Act, 2017 and appeal will be taken for consideration on merits - Section 100 of Central Goods and Services…

In re: LIONS SEAT CUSHIONS PVT. LTD.

Advance ruling - Appellate authority - Appeals to - Limitation period - Appellant was engaged in running cold storage of agriculture produces like tamarind, apple, dates, potato, tomato and chilies - Assessee suffered from COVID during period of pronunciation of verdict of AAR and he was advised by his doctor to be in rest for 2 years as he was a senior citizen - Thus appeal against order of AAR was filed after a delay of 920 days - Assessee had filed application for condonation of delay - HELD : As per Section 100 of CGST Act, 2017 appeal has to be filed within 30 days from date of communication of AAR order that is sought to be challenged and appellate authority is empowered to allow appeal to be presented within further period not exceeding 30 days if it is satisfied that assessee was prevented by sufficient cause from presenting appeal within initial period of 30 days - In instant case, there had been a delay of 920 days from last date of filing appeal under Section 100(2) - Hence, appellate authority was not empowered to condone said delay in filing - Therefore, appeal filed by assessee was to be dismissed on ground of limitation without going into merits - Section 100 of…

In re: ARUN COOLING HOME

Afforestation, reforestation and revegetation - ‘Support services to agriculture, forestry, fishing, animal husbandry’ - Heading 9986 - Exemption - Assessee was a social enterprise in India that is formed for social purpose to assist people and society and rural development - Assessee had entered into project development agreement with SE Ltd. for Afforestation, Reforestation and Revegetation (ARR) for sustainable agriculture and land management and afforestation - Assessee should, on quarterly basis issue written request to SE Ltd. (Cash Call) for advance of amount that was equal to assessee’s total budgeted expenditure (inclusive of all Operating Expenses) for next quarter after adjusting for any prior unused advances funded - Assessee sought advance ruling on issue whether its activities under agreement qualified as ‘composite supply’ under GST law with Principal Supply as “Support services to agriculture, forestry, fishing, animal husbandry” as provided in Sl. No. 24 of Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 and whether taxable rate applicable would be ‘NIL’ in Term No. 24 of Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 - HELD : Services said to have…

In re: ARCHIPEL INDIA FOUNDATION

Recovery from employees - Canteen services - Contractual agreement between employer and employee - Applicant enters into a contract with a Canteen Service Provider (‘CSP’) to provide canteen facilities to it’s workers at factory premises - Invoice is raised by CSP with applicable GST on basis of consumption by employees - A part of canteen charges is borne by applicant whereas remaining part borne by employees is collected from employee’s salaries and paid to CSP by applicant - On application for advance ruling in respect of permanent employees - HELD : Applicant’s has employed around 1500 employees who have been provided with canteen facility, having a demarcated area in factory premises, in terms of Section 46 of Factories Act, 1948 - As per C.B.I. & C. Circular No. 172/04/2022-GST, perquisites provided by ‘employer’ to ‘employee’ in terms of contractual agreement entered into between employer and employee, are not be subjected to GST when same are provided in terms of contract - Therefore, deduction made from employees availing food in factory is not be considered as a ‘supply’ and thus no GST is be applicable on employee’s portion - Section 9 of Central Goods and Services Tax…

In re: KOHLER INDIA CORPORATION PVT. LTD.

Tax deduction at source - Notified person - PSU Applicant is a manufacturer of fertilizers and claims to be a public company - Applicant further submits that it is making supplies of fertilizers to National Fertilizers Limited (NFL) which is also a public sector undertaking - Applicant submits that NFL is making tax deduction at source under Section 51 of CGST Act, 2017 even though such tax deduction is exempted - Applicant sought Advance ruling on question whether applicant can be classified under notified person and whether applicant to pay GST TDS by deducting it from consideration payable to supplied - HELD : Applicant is to be classified as notified person and applicant supplier does not attract TDS - Section 51 of Central Goods and Services Tax Act, 2017 - Section 51 of Telangana Goods and Services Tax Act, 2017. [para 8]

In re: RAMAGUNDAM FERTILIZERS AND CHEMICALS LTD.

Car seats cushion suspension wire - Seats and Parts thereof - Heading 9401 - Classification - Applicant-assessee is engaged in manufacture of car seats cushion suspension wire sought advance ruling for classification of its products - HELD : For any product to classify under Heading 9401 same has to be in nature of ‘parts of seats’ - Cushion suspension wire is used instead of coil springs and these are used both in front and back seats of car and also these are forming part of basic skeleton steel structure of seats - Thus without said item, basic structure of seat cannot be achieved and basic function of cushion effect in car seats cannot be achieved - Hence said item is a part of seat, as it is one of building blocks of steel structure and integral part of seat - Therefore car seat cushion suspension wire manufactured by assessee will fall under Tariff Item 9401 99 00 and thereby attracting 18% GST - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Tamil Nadu Goods and Services Tax Act, 2017. [paras 6.5 and 8] Steel hooks - Seats and Parts thereof - Heading 9401 - Classification - Applicant-assessee is engaged in manufacture of steel hooks used for car seats -…

In re: N.R. ENGINEERING INDUSTRIES

Input Tax Credit - Credit and blocked credit apportionment - Restriction on availment of ITC - Construction of industrial building - Applicant assessee is constructing an industrial building which is to be rented out as ‘godowns’ for commercial purposes - Assessee will be purchasing cement, steel, other building material and will be engaging architects/consultants for construction of said building - HELD : Section 17(5)(d) of CGST Act, 2017 provided that no ITC is available in respect of any goods or services received by a taxable person for construction of immovable property on his own account even if inputs and input services are used in course and furtherance of business - In instant case, assessee himself built godown for which he has used various goods such as cement, steel, brick etc. as inputs and services by architects, consultant etc. as input services and furthermore, assessee is proposing to rent out to large companies for storing their stocks for future sale i.e. for furtherance of his business - Therefore, as per Section 17(5)(d) ibid no ITC is available on any goods or services by applicant for said construction and same cannot be claimed - Section 17 of Central Goods…

In re: SUSWANI FOUNDATIONS (P.) LTD.

Car seat covers - Motor vehicle parts and accessories - Heading 8708 - Car seat covers manufactured and designed to permanently fit over raw foam seat of vehicles - Applicant is engaged in manufacturing and supplying original car seat covers made from fabric, designed to fit permanently over raw foam seat installed in vehicle, to Original Equipment Manufacturers (OEMs) as well as to seat manufactures who further sold it to OEMs, sold with vehicle - On question, whether such seat is classifiable under Heading 9401, liable to GST at rate of 18% under Sl. No. 435A of Schedule III of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 - HELD : Permanent seats were explicitly designated for exclusive utilization within a specified motor vehicle, thereby serving a specialized function meticulously aligned with precise design and manufacturing specifications of said particular vehicle - Nomenclature ‘Permanent seat cover’ was employed to underscore highly specialized nature of these seating arrangements, exemplifying a bespoke creation characterized by an assiduous focus on detail, ensuring seamless integration with intended motor vehicle - Distinctive design and bespoke manufacturing…

In re: SADDLES INTERNATIONAL AUTOMOTIVE & AVIATION INTERIORS PVT. LTD.

Advance ruling - Procedure on application - Matter pending or decided - Violation of Natural Justice - Appellant State Medical Council collects various fees for issuing Provisional, Undergraduate, Post Graduate Certificates, No Objection Certificate, Certificate of Goods Standing, CME certificates etc. - Assessee’s application for advance ruling for clarification of GST applicability on various fees is rejected by AAR based on fact that investigation was conducted by DGGI against appellant which would amount to proceedings pending against assessee on date of filing advance ruling application - HELD : Principles of natural justice was not followed in instant case since advance ruling authority had erred in not sharing documents and comments forwarded by DGGI with appellants - Advance ruling authority ought to have shared new findings of DGGI that was lying before them, and discussed same in detail, either during personal hearing or thereafter, before proceedings to finalize case - Therefore, order of AAR was to be set aside and matter was remanded back for consideration - Section 98 of Central Goods and Services Tax Act, 2017 - Section 98 of Tamil Nadu Goods and Services Tax Act,…

In re: TAMILNADU MEDICAL COUNCIL

Transfer of allotted land - Other miscellaneous service - Heading 9997 - Classification - Industrial plot was allotted to applicant by area industrial development authority under 99 lease deeds on payment of lump sum upfront premium and annual lease charges - Applicant wished to sell said land for certain consideration - Buyer has to pay transfer charges to area industrial development authority for permission for such sale - HELD : As per Section 7(1) of CGST Act, 2017 read with Schedule II benefits arising out land i.e. any lease, tenancy, easement, license to occupy land, letting out of a building including a commercial, industrial or residential complex of business or commerce are not be treated as transaction in immovable property but as supply of services for purpose of GST Act - Activity of assessee in nature of transfer one’s leasehold rights, it does not amount to further sub-leasing as assessee right as per deed of sub-lease stands extinguished after assignment and neither it create fresh benefit from land - It is in nature of compensation for agreeing to do transfer of assessee’s rights in favour of assignee - Thus, said service is classifiable under other miscellaneous…

In re: REMARKABLE INDUSTRIES PVT. LTD.

Renting of property for commercial use - Real estate services - Heading 9972 - Classification - Applicant is an owner of property for which he has entered into lease agreement with Back Office IT Solutions Private Limited (lessee) which is engaged in business of providing comprehensive, independent fund accounting, reporting, and analytics solutions to fund administrators providing administration services to hedge fund industry - Lessee is required to pay monthly rent of ` 99,125 - HELD : Residential dwelling means living in a certain place permanently or for a considerable length of time - Said property has been leased/rented for commercial use and thus cannot be covered under definition of residential dwelling and therefore said supply of service i.e. renting property for commercial use is covered under Heading 9972 12 and taxable at rate of 18% - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Rajasthan Goods and Services Tax Act, 2017. [para F]

In re: DEEPAK JAIN

Medical Equipments - Stadiometer and Infanometer - Heading 9018 - Classification - Applicant-assessee is manufacture & supplier of Stadiometer, lnfantometer and other hospital/medical equipment’s, furniture - HELD : Infantometer is used for purpose of measuring height/length of infants - Stadiometer is described as piece of medical equipment used for measuring human height and it is used in routine medical examination and for clinical tests and experiments - Heading 9018 incorporates instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other electromedical apparatus and sight-testing instruments - Since both these instruments, Stadiometer and lnfantometer have clinical used and are described as diagnostic instruments, said medical equipments are covered under Tariff Item 9018 90 19 and are liable to GST @ 12% - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Rajasthan Goods and Services Tax Act, 2017. [para F]

In re: BHAWNA KHANDELWAL

Clear Float Glass - Float glass and surface ground or polished glass - Heading 7005 - Imported from Malaysia and traded by Applicant - Question referred in instant application was, appropriate classification of product imported “Clear Float Glass traded by Applicant - From Bills of Entry it was found that said product was classified under Tariff Item 7005 29 90, whereas, applicant was claiming subject goods under Tariff Item 7005 10 90 - HELD : No wire mesh was reinforced in glass during manufacturing process, hence subject goods was Non-wired Glass - As per description of sub-heading 7005 10 i.e., absorbent, reflecting or non-reflecting layer, what was intended to be classified under sub-heading 7005 10 was glass coated with an absorbent, reflecting or non-reflecting layer - It was made clear, in Chapter notes that absorbent layer was a microscopically thin coating of metal or metal oxide which had to be applied during manufacturing process itself to glass before process of annealing, so as to not regard glass as worked upon - Applicant was of view that tin layer was an absorbent layer, for which they relied on test report given by Central Glass & Ceramic Research Institute,…

In re: FLOAT GLASS CENTRE

Bio-fertilizers - Any Chapter - Classification - Applicant sought to know whether Urban Roots and Bio-Kavach being bio-fertilizers, are classifiable under Tariff Item 3003 90 11 attracting 12% GST or Tariff Item 3101 00 92 attracting 5% GST - HELD : No specific entry provided in Notification No. 1/2017-C.T. (Rate) covering bio-fertilizers - Organic fertilizer and bio-fertilizer have been defined separately in Fertilizer (Control) Order, 1985 - Tariff Item 3101 00 92 covers organic fertilizers and not bio-fertilizers - Bio-fertilizers are covered under residuary entry attracting 18% GST - Section 9 of Central Goods and Services Tax Act, 2017 - Section 9 of Telangana Goods and Services Tax Act, 2017. [para 8] Immunity boosters - Any Chapter - Classification - Applicant sought to know whether Immunity Booster is classifiable under Tariff Item 2202 99 attracting 18% GST or Tariff Item 3003 90 11 liable to 12% GST - HELD : Description of product does not indicate any cure and therefore does not fall under Chapter 30 and does not attract lower rate of tax - Immunity boosters are not specified in Schedule I or II and therefore would fall in residual entry at Sl. No. 453 of Schedule III of…

In re: AVINJA BIOTECHNOLOGIES PVT. LTD.

Advance Ruling application - Maintainability of - Applicant operating a restaurant had taken a premises on sub-lease basis from Hard Castle Restaurants Pvt. Ltd - Premises housed both restaurants but had a common electricity connection - Applicant sought advance ruling on question whether when sub-lessor charges electricity based on sub-meter reading in addition to rent as per sub-lease agreement for immovable property rented to tenant, whether sub-lessor was liable to charge and pay GST on electricity charged by it - HELD : Applicant was not supplier of service and ruling sought was not for admissibility of input tax credit in respect of supply received by applicant, who is seeking to ascertain liability of his supplier, i.e., sub-lessor - Hence applicant had no locus standi in seeking advance ruling - Section 97 read with Sections 95, 98 and 103 of Central Goods and Services Tax Act, 2017 - Section 97 read with Sections 95, 98 and 103 of Gujarat Goods and Services Tax Act 2017. [paras 11 To 15]

Advance Rulings