AAR and AAAR Weekly Round-Up

This round-up analytically summarises the key stories related to the Goods and Services Tax Authority for Advance Ruling ( AAR ) and Appellate Authority for Advance Ruling ( AAAR ) reported at Taxscan.in during the period from April 20 to May 3, 2024. GST ITC Available for Canteen Services Provided Only to Permanent Employees, Not Contractual Workers: Andhra Pradesh AAR M/s KSH Automotive pvt Ltd CITATION: 2024 TAXSCAN (AAR) 129 The Andhra Pradesh Authority for Advance Ruling ( AAR ) has ruled that the Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) is available for canteen services provided only to the permanent employees and on the contractual workers. The bench also mentioned the condition that the burden of GST has not been passed on to the employees.In light of these submissions and facts, the AAR bench of K. Ravi Sankar and R V Pradhamesh Bhanu concluded that the applicant is eligible for ITC on GST charged by canteen vendors, given the mandatory nature of maintaining a canteen and the proviso under the blocked credit subsection. However, the eligibility is based on twin conditions: Subject to the condition that the burden of GST have not been passed on to thc employees. The applicant is eligible for proportionate ITC on permanent employees, on food supplied by canteen service to employees only and not contractual workers. Red Gram Dal Supplied via HACA to Non-Commercial Industrial or Institutional Consumers Not Subject to GST: Telangana AAR M/s.Narayan Trading Corporation CITATION: 2024 TAXSCAN (AAR) 130 In a recent ruling, the Telangana Authority for Advance Ruling ( AAR ) ruled that the Red Gram Dal supplied through Hyderabad Agricultural Cooperative Association Limited ( HACA ) to Non-Commercial Industrial or Institutional Consumers are not subject to Goods and Services Tax ( GST ).The two-member bench of S.V. Kasi Visweswara Rao and and Sahil Inamdar noted that “the supplies made to institutional consumers meeting specific criteria, such as bearing a “not for retail sale” declaration and being used solely for institutional purposes, are exempt from CGST & SGST.” With regards to the 1st issue, the AAR bench declared that the Department for Women, Children, Disabled & Senior Citizens will be covered under the definition of “industrial consumer or institutional consumer”. With regards to 2nd issue, the goods supplied by the applicant through the Nodal Agency – Hyderabad Agricultural Co-operative Association Limited ( HACA ) do not attract GST. However, the both is possible on following conditions: The packaged commodities are bearing a declaration ‘not for retail sale”. The purchase is made directly from the manufacturer or from an importer or from wholesale dealer The purchase is made for use by that institution and not for commercial or trade purpose. Rental / Leasing Charges for Industrial Equipments provided with operator falling under HSN Codes: 84151090 shall attracts 28% GST: AAR M/s. Ventair Engineers CITATION: 2024 TAXSCAN (AAR) 131 The Telangana Authority for Advance Ruling ( TAAR ) has held that rental/leasing charges for industrial equipment provided with operators falling under HSN Codes: 84151090 shall attract 28% Goods and Service Tax.The two member bench of Authority of Advance Ruling comprising S.V. Kasi Visweswara Rao ( Additional Commissioner commercial Taxes ) and Sahil Inamdar, I.R.S ( Additional Commissioner Custom & Indirect Taxes ) observed that rental/leasing charges for industrial equipment provided with operators falling under HSN Codes:84151090 shall attract 28% Goods and Service Tax. Manufacturing of Teicoplanin and Caspofungin under Drugs & Medicines shall attracts 5% GST :AAR M/s. Stanex Drugs & Chemicals Private Limited CITATION: 2024 TAXSCAN (AAR) 132 The Telangana Authority for Advance Ruling(TAAR) has ruled that manufacturing of teicoplanin and caspofungin under drugs & medicines should be attracted 5 % Goods and Service Tax.The two member bench of Authority of Advance Ruling comprising S.V. Kasi Visweswara Rao (Additional Commissioner commercial Taxes) and Sahil Inamdar, I.R.S(Additional Commissioner Custom & Indirect Taxes) observed that manufacturing of teicoplanin and caspofungin under drugs & medicines should be attracted 5 % Goods and Service Tax. Production and supply of fertilizers Urea and Ammonia shall not attract GST TDS, when recipient fall u/s 51(1) (a), (b), (c), (d) of CGST Act: AAR M/s. Ramagundam Fertilizers And Chemicals Limited CITATION: 2024 TAXSCAN (AAR) 133 The Telangana Authority for Advance Ruling ( TAAR ) has held that production and supply of fertilizers urea and ammonia should not attracts Goods and Service Tax ( GST ) Tax Deduction at Source ( TDS ) when the recipient falling under section 51(1) (a), (b), (c), (d) of Central Goods and Service Tax Act, 2017.The two member bench of Authority of Advance Ruling comprising S.V. Kasi Visweswara Rao (Additional Commissioner commercial Taxes) and Sahil Inamdar, I.R.S(Additional Commissioner Custom & Indirect Taxes) observed that The Applicant is established by the Government under the ministry of fertilizer as a PSU. ii. Cumulative shareholdings in the company i.e., 87.3% belong to Central PSUs & the State Government of Telangana. Thus the applicant falls under section 51 (1) (d) of the CGST Act. Hence By virtue of the above status any supplies made to persons falling under clauses (a), (b), (c) & (d) of the sub-section (1) of section 51 will not attract TDS at the hands of the recipients of such supplies by virtue of Notification No.73/2018 dt: 31-12-2018. Export of pre packaged and labeled rice upto 25KGs to foreign buyers shall levy GST :AAR M/s.Sarala Foods Private Limited CITATION: 2024 TAXSCAN (AAR) 134 The Andhra Pradesh Authority for Advance Ruling ( AAR ) has held that export of prepackaged and labeled rice upto 25KGs to foreign buyers should levy Goods and Service Tax ( GST ).The two member bench of Authority of Advance Ruling comprising K Ravi Sankar ( Commissioner of State Taxes ) and B Lakshmi Narayan ( Joint Commissioner of Central Tax ) observed that export of prepackaged and labeled rice upto 25KGs to foreign buyers should levy Goods and Service Tax ( GST ). Supply of pre packaged and labeled Rice up to 25KGs to factory of exporter will apply GST :AAR M/s.Seetharamanjaneya Sortex CITATION: 2024 TAXSCAN (AAR) 135 The Andhra Pradesh Authority for Advance Ruling(TAAR) has held that supply of pre packaged and labeled rice upto 25 KGs to factories of exporter would apply Goods and Service Tax (GST) .The two member bench of Authority of Advance Ruling comprising K Ravi Sankar (Commissioner of State Taxes) and R V Pradamesh Banu (Joint Commissioner of Central Tax ) observed that supply of pre packaged and labeled rice upto 25 KGs to factories of exporter would apply Goods and Service Tax. AIIMS can not claim GST Exemption on pure services received from Vendors: AAR M/s. All India Institute Of Medical Sciences CITATION: 2024 TAXSCAN (AAR) 136 The Telangana Authority for Advance Ruling ( TAAR ) has ruled that All India Institute of Medical Sciences ( AIIMS ) could not claim Goods and Service Tax exemption on pure services received from the vendors. The two member bench of Authority of Advance Ruling comprising S.V. Kasi Visweswara Rao ( Additional Commissioner commercial Taxes ) and Sahil Inamdar, I.R.S ( Additional Commissioner Custom & Indirect Taxes ) held that All India Institute of Medical Sciences could not claim Goods and Service Tax Exemption on pure services received from the vendors. Support services to agriculture, forestry, fishing, animal husbandry not composite supply under GST Law: AAR M/s. Archipel India Foundation CITATION: 2024 TAXSCAN (AAR) 137 The Andhra Pradesh Authority for Advance Ruling ( AAAR ) has ruled that support services to agriculture , forestry, animal husbandry not composite supply under Goods and Service Tax law.The two member bench of Authority of Advance Ruling comprising K Ravi Shankar Commissioner of State Tax (Member) and B Lakshmi Narayana IRS, Joint Commissioner of Central Tax (Member) observed that the activities required to be undertaken for the purposes of achieving the Project Objectives are not purely related agricultural activities but also involves activities such as Project Design, Carbon Accounting, Validation, Monitoring, Reporting and Verification, Project Administration, Project Operations, Biodiversity Impact Assessment, Community Engagement etc Hence such activities doesn’t quite fit the definition of support services 9986. Hence the bench concluded that the applicant wants to make it look like they’re doing good things for the environment, like planting trees. They’re saying it’s a social enterprise. But, behind this seemingly good intention, their main goal is to make a profit from trading carbon credits. They want to benefit from support services to maximize their gains. Understanding the legal situation around carbon credit trading is complex. Though the worker or activities undertaken by the appellant as per agreement viz., project during doesn’t fall under the support services to agriculture under SI.No.24 of Heading 9986 of Notification No.11/2017-Central Tax(Rate), dated 28th June, 2017 The authority held that the support services to agriculture , forestry, animal husbandry not composite supply under Goods and Service Tax law. Work contracts service for construction of plumbing stations and reservoirs is not covered under exemption Notification No. 12/ 2017 Central Tax: AAR M/s. KBL SPML JV CITATION: 2024 TAXSCAN (AAR) 138 The Karnataka Authority for Advance Ruling ( KAAR ) has ruled that the work contracts service for construction of plumbing stations and reservoirs is not covered under exemption notification no. 12/ 2017 Central Tax. It was observed by the authority that the contracts cover civil works where the supply of goods is also involved and thus such service falls under work contract service and hence it cannot be a pure service. After analyzing the submission the two member bench of Authority of Advance Ruling comprising M P Ravi prasad ( Member ) and Kiran Reddy T ( Member ) held that the work contracts service for construction of plumbing stations and reservoirs is not covered under exemption notification no. 12/ 2017 Central Tax. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

AAR and AAAR Weekly Round-Up

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