AAR and AAAR Weekly Round-Up

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AAR and AAAR Weekly Round-Up

AAR and AAAR Weekly Round-Up

This weekend summary provides an analytical synopsis of the most major stories of Goods and Service tax Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) that were authored at Taxscan.in during the one week from to April 9 to April 15, 2023

The Rajasthan Authority for Advance Ruling (AAR) has rejected the application of the applicant, Glensky Spirits Pvt. Ltd., for seeking an advance ruling as the question raised before the authority was vague
The Authority observed that there are many types of construction services being received by the applicant and no detailed submission about construction work was made categorically in the application by the applicant.

The bench finds that availability of ITC on services depends on so many factors viz. type and nature of services, condition of services supplied etc. It was also noted that the comments of the state officer were also not clear in this matter. The Authority members further added that the Applicant is going for setting up a plant without knowing the nature of construction categorically and it is not possible to give a ruling unless and until details are provided. It was thus opined that “Availment of ITC without specific details cannot be generalized and ruling cannot be given in the absence of particular services.”

The Rajasthan bench of Umesh Garg and Mahendra Singh Kavia Authority of Advance Ruling (AAR) has recently ruled that the construction services provided by the applicant through a works contract with the Rajasthan Housing Board attract Goods and Services Tax (GST) at the rate of 18 % IGST.
The authority thus ruled that, “The services provided by the applicant to RHB after 13.07.2022 onwards until the rate is not changed it will attract a rate of 18% GST.”

Gujarat bench of Samir Vakil and Vivek Ranjan Appellate Authority for Advance Ruling (GAAAR) ruled that there is no GST exemption to the supplier of the manpower services to the Central, State or local government.

The authority observed that the words “or a Governmental authority or a Government Entity” in the heading Description of services against the referred Entry No.3 to Notification No.12/2017-Central Tax (Rate) have been omitted vide Notification No. l6/2021-Central Tax (Rate) dated 18.11.2021.

Further the bench observed that the appellant in their appeal has admitted that there is no entry exempting such services provided to Government offices.
The authority observed that the manpower services provided were not related to any activity in relation to any function carried out by these service recipients as entrusted under articles 243G or 243W of the Constitution of India.

The Gujarat bench of Samir Vakil and Vivek Ranjan Appellate Authority for Advance Ruling (GAAAR) ruled that 18% Goods and Services Tax (GST) is applicable on the services supplied by the sub-sub-contractor to sub-contractors.

After reviewing the arguments, the bench concluded that the appellant is subject to tax discharge at a rate of 18% under Entry No. 3(ii) of Notification no. ll/2017-CT(R) of June 28, 2017, as subsequently revised by Entry No. 3(xii) of the aforesaid Notification.

The bench observed that entry no. 3(iii) of the subject Notification provides fbr rate of tax at l2% if any taxable person is providing composite supply of works contract as defined in section 2(119) of CGST Act, 2017 to Central Government, State Government, Union Territory, a local authority or a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of: a historical monument. Archaeological site or remains of national importance, archaeological excavation. or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act. 1958 (24 of 1958); canal, dam or other irrigation works; pipeline, conduit or plant for (i) water supply (ii) water treatment. or (iii) sewerage treatment or disposal.

The Rajasthan Bench of Umesh Garg and Mahesh Kumar Gowla the Authority for Advance Ruling (AAR) has recently rejected an advance ruling application with respect to which supplies were already being undertaken and Goods and Services Tax (GST) was already being paid by the applicant.

The Authority observed that, “the purpose of Advance ruling is to provide certainty of tax liability in advance in relation to a future activity to be undertaken by the applicant and help the applicant in planning about GST liability on activities well in advance along with proper interpretation and understanding of tax laws. Advance rulings can be given only for a proposed transaction & matters related to qualify for advance ruling whether it will be undertaken or proposed to be undertaken

The payment received by the Cooperative Housing Society (CHS) from the departing member in the name of gratuitous payment/voluntary contribution is now taxable under the Goods and Services Tax (GST), according to a recent decision by the bench of Rajeev Kumar Mital and Dr. DK Srinivas of Maharashtra Appellate Authority for Advance Ruling (MAAR).

The Gujarat bench Milind Kavatkar and Amit Kumar Misra, Authority for Advance Ruling ( AAR ) has held that Goods and Service Tax (GST) would not be applicable on subsidized deductions made from employees availing food in the factory.

The Division Bench held that the subsidized deduction made by the applicant from the employees who were availing food in the factory would not be considered as a supply’ under the provisions of section 7 of the CGST Act, 2017.

The Gujarat bench of Milind Kavatkar and Amit Kumar Misra Authority for Advance Ruling (AAR) has held that no Goods and Service Tax (GST) would be applicable upon the amount of portion of canteen charges which was recovered from employees.

The Bench determined that GST would not be leviable on the amount representing the employee’s portion of canteen charges recovered/collected by the applicant from its employees and paid to the canteen service provider on behalf of the employee since it would not be considered as a supply under the provisions of section 7 of the CGST Act,2017 and the GGST Act,20l7.

The Gujarat bench of Milind Kavatkar and Amit Kumar Misra Authority for Advance Ruling (AAR) has rejected the advance ruling application on finding that the application was filed by the non-supplier without requisite fee.

The Division Bench rejected the application finding that the application was not filed by KhanepeHungermall LLP, but by the Chartered Accountant in his own name. Since the person who had applied was not the person who proposed to undertake the supply. the question of- giving an advance ruling would not arise. It was also found that It had been filed without requisite fee.

The Andra Pradhesh bench of K. Ravi Sankar and RV Pradhamesh Bhanu ,Authority for Advance Ruling (AAR) has held that no Goods and Service Tax (GST) would be applicable on the supply of 1kg red gram Dal secondary packing to 50kg bags to civil suppliescorporations.

The Authority observed that the first and foremost condition of taxability was that the commodity should have been a pre-packed commodity which meant that the commodity was not packed for any specific known buyer. In the instance case the applicant was packing the commodity at the behest and at the specific instructions of the buyer, AP State Civil Supplies Corporation Limited

The Gujarat bench of Milin Kavatkar and Amit Kumar Misra Authority for Advance Ruling (AAR) has rejected the application on the admissibility of the Input Tax Credit (ITC) as the applicant was not found to be the supplier.

The Division Bench rejected the application finding that the applicant in the present proceeding was neither a supplier of the goods/service nor is the ruling sought on Input Tax Credit in respect of the supply received by the applicant. “We find that the applicant before us is not the supplier of the service and [b] that the ruling sought is not for admissibility of input tax credit in respect of supply received by the applicant. In fact, it is the supplier who may seek an advance ruling in the matter. This being the factual matrix, we find that the applicant before us has no locus standi in seeking a ruling in the facts of the present case” the Bench observed.

The Andhra Bench of K. Ravi Sankar, Pradesh and RV Pradhamesh Bhanu, Authority for Advance Ruling (AAR) has held that no Goods and Services Tax (GST) would be applicable upon the amount recovered from employees for canteen and transportation facilities.

The Authority determined that no GST would be applicable on the amount recovered from employees for canteen and transportation facilities. “The transportation services is not a supply to the applicant made in the course or furtherance of business and the recoveries made by the applicant from their employees does not fall under the definition of supply under Section 7,” the Bench further observed.

The Andhra Pradesh Bench of Ravi Sankar and RV Pradhamesh Bhanu, Authority for Advance Ruling (AAR) has held that 18% Goods and Services Tax (GST) would be applicable upon the liquidated damages collected from Chettinad Logistics Pvt Ltd for non-performing the acts .

The Authority observed in the light of section 7 read with definition of consideration under section 2(31), that the liquidated damages paid by defaulting party to the non-defaulting party for tolerating the act of non-performance or breach of contract have to be treated as consideration for tolerating of an act or a situation under an agreement and hence such an activity would constitute supply of service and the liquidity damages were exigible to tax under CGST and SGST @9% each under the chapter head 9997 at serial no. 35 of Notification No.11/2017-Central/State tax rate.

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