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 May 25, 2024 to June 15, 2024.
The Rajasthan Authority for Advance Ruling ( AAR ) has issued a significant ruling on the applicability of Input Tax Credit ( ITC ) claims for Goods Transport Agencies ( GTAs ) on transport vehicles purchased before the new GST mechanism came into effect.
The two-member bench of Mahipal Singh and Mahesh Kumar Gowla acknowledged the change in tax mechanism and its impact on ITC claims. However, they noted that the applicant was a registered person under the GST Act, and the transport vehicle was intended for use in the course or furtherance of their business. The bench ruled that claim of ITC is available on the vehicle by specifying conditions that the ITC amount will be subject to a reduction of 5% per quarter, or part thereof, calculated from the invoice date of the purchase. This reduction reflects the transition from RCM to FCM.
The Authority for Advance Rulings (AAR) in Karnataka ruled that the supply of teachers and lecturers to schools and colleges run by municipalities is exempt from Goods and Services Tax (GST).
The two-member bench of M.P Ravi Prasad and Kiran Reddy. ruled that âthe service of supply of teachers/lecturers to schools/colleges run by BBMP, on outsource basis is covered under pure services being provided to a local authority (BBMP) by way of an activity in relation to a function âPromoting educational aspectsâ entrusted to a Municipality under article 243W of the Constitution of India and hence are exempted in terms of entry number 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.â
The Karnataka Authority for Advance Rulings has held that the Advance Authority cannot give any decision on issues that are not covered under section 97(2) of Central Goods and Service tax ( CGST ) Act, 2017. It was found that the applicant is already registered under GST and the questions on which advance ruling has been sought for are not covered under the issues mentioned under Section 97 (2) of the CGST Act and the application is liable for action in terms of Section 98(2) of the CGST/KGST Act 2017.
AAR bench comprising M.P. Ravi Prasad and Kiran Reddy observed that the authority canât give any decision on the issues that are not covered under Section 97 (2) of the CGST Act 2017. The applicant is already registered under GST and the questions on which advance ruling has been sought for are not covered under the issues mentioned under Section 97(2). Thus, the instant application is liable for action in terms of Section 98(2) of the CGST/KGST Act 2017. The authority rejected the application filed by the Applicant for advance ruling in terms of Section 98(2) of the CGST Act.
The Karnataka Authority for Advance Rulings held that supply of database service to AllMS is not covered under Goods and Service Tax ( GST ) exemption under Notification. The applicant is seeking the rate of tax/ exemption on the supplies under the Clinical Key subscription product supplied to specific customers ( educational institutions ). It was observed that the customer, with the Clinical Keyâ subscription, gets online access to a medical centric database with a search facility and no human intervention is available.
The AAR bench comprising Dr. M.P. Ravi Prasad and Kiran Reddy T observed that the customer, with the Clinical Keyâ subscription, gets online access to a medical centric database with a search facility. The website also has a browser facility for navigation of the content that is supplied in electronic form. There is no human intervention from the applicantâs side as the user himself navigates through the contents and access whatever that is available in the subscribed database. The Authority held that the supply of services by the applicant to AllMS is not covered under exemption in terms of Entry No. 69(b)(v) of the Notification No. 9/2017-1T(Rate) dtd 28.6.2017 as amended.
The Karnataka Authority For Advance Ruling ( AAR ) has held that Advance Ruling on completed supply of self-assessed tax is beyond jurisdiction of authority and rejected the same.
The AAR Comprising Dr. M.P. Ravi Prasad and Kiran Reddy T observed that Section 95(a) of the CGST Act 2017, while defining the term âadvance rulingâ, stipulates that an applicant can seek advance ruling on the questions specified under Section 97 (2) 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 said applicant. It was found that the questions, on which the applicant seeks advance ruling, are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant, but in relation to a completed supply on which self-assessed tax is discharged by the applicant.
The AAR held that the application is beyond the jurisdiction and rejected, the same in terms of Section 98(2) of the CGST Act 2017.
The Uttar Pradesh Authority For Advance Ruling ( AAR ) ruled that sleeping bags are classifiable under the category of âMattressesâ ( Chapter Heading 9404 30 90 ) of Goods and Service Tax ( GST ) Tariff and 12% GST is payable.
The AAR comprising Amit Kumar and Harilal Prajapati ruled that âThe product âsleeping bagâ as described in the application will merit classification under Chapter Heading 9404 30 90 of the GST Tariff and would be chargeable to GST at applicable rate @ 12% (CGST @ 6%, SGST @ 6%) under the said tariff entry, presently read with Notification No. 01/2017-Central Tax (Rate) dt. 28.06.2017 (as amended ) ( Sl. No. 224 of Schedule-Il)â.
The Rajasthan Authority for Advance Ruling ( AAR ) has held that used metal scarps are not second-hand goods and have no benefit under the margin scheme in terms of Rule 32(5) of Central Goods and Service Tax ( CGST ) Rules 2017.
The authority comprising Mahipal Singh and Mahesh Kumar Gowla held that the items to be dealt with by the applicant do not qualify to be Second-Hand Goods and therefore the applicant is not eligible to operate under the Margin Scheme in terms of Rule 32(5) of Central Goods and Service Tax Rules, 2017.
The AAR held that since the items to be dealt with by the applicant do not qualify to be Second-Hand Goods, the applicant is not eligible to operate under the Margin Scheme in terms of Rule 32(5) of Central Goods and Service Tax Rules, 2017 read with corresponding provisions of SGST Rules, 2017.
In a recent case, the Gujarat Authority For Advance Ruling ( AAR ) has held that the Special Economic Zone ( SEZ ) is not required to pay Goods and Service Tax ( GST ) under Reverse Charge Mechanism ( RCM ) for legal services received by Virtue of Notification on Central Tax Rate.
The authority held that the applicant, an SEZ unit, is not required to pay GST under RCM on specified services under notification No. 10/2017-1T(Rate) dated 28.6.2017 as amended from time to time, subject to furnishing a LUT or bond as specified in condition (i) of 1 of notification No. 37/2017-CT
In a recent ruling, the Uttar Pradesh Authority For Advance Ruling ( AAR ) ruled that 15% Goods and Service Tax ( GST ) is applicable only on supervision charge fees when the value of materials and cost of execution of work was borne by the service recipient.
The authority observed that âwhere the value of materials and cost of execution of work for installation of electric lines are borne by the recipient of service and the applicant charges supervision fees only, the value of materials and cost of installation shall not be included in the value of supply for determination of taxable value under GST and the applicant shall be liable to pay GST only on the supervision charges.â Further held that 15% GST is chargeable on supervision fee as in the second mode the entire work with material is arranged by the customers and installation work is done by the contractors hired by the customers.
The Uttar Pradesh Authority for Advance Ruling ( AAR ) held that the sale of residential units of the project is not a sale of immovable property but a sale of services and GST is leviable. Once, GDA denies the Completion Certificate to the applicant, the Completion Certificate cannot be said to be deemed approved.
Once, GDA denied the Completion Certificate to the applicant. Hence, a Completion Certificate cannot be said to be deemed approved. The âfirst occupationâ cannot be said to be taken either. Thus, the sale of residential units in Phase IV of the project by the applicant is not a sale of immovable property but a sale of services and thus GST is leviable.
The AAR held that the sale of residential units in Phase IV of the project by the applicant is not a sale of immovable property but a sale of services and thus GST is leviable.
The Rajasthan Authority for Advance Ruling ( AAR ) ruled that 18 % Goods and Service Tax ( GST ) is Payable on âMilk food for babiesâ and âMilk for babiesâ. It was found that the Principle/dominant item of the applicant is the manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute for motherâs milk for infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090.
The AAR found that the Principle/dominant item of the applicant is manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute to motherâs milk for the infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090. Since, it is established that the final product manufactured by the applicant is classifiable under 19011090, the rate of GST payable by them in term of Notification No.01/2017 (Central Rate) dated 28.06.2017 is 18% GST (9% CGST & 9% SGST/ 18% IGST).
The Gujarat Authority for Advance Ruling ( AAR ) held that the activity of insulating bare M.S. Pipes on a job work basis using PU Foam and PE Film/HDPE jackets attract 18 % Goods and Service Tax ( GST ). The authority held that the activity of insulating bare M.S. Pipes provided by the registered customers on a work basis using PU Foam and PE Film/HDPE jackets would be classifiable under Sr. No. 26 of notification No. 11/2017-CT (Rate) dated 28.6.2017.
It was observed that âfor services by way of treatment of processing undertaken by the applicant on physical inputs which are owned by persons other than those registered under the CGST Act, would be classified under 26(iv) of notification no. 1 1/2017-CT(Rate), ibid, under the heading 9988.â
The Gujarat Authority for Advance Ruling ( AAR ) has ruled that Special Economic Zone ( SEZ ) Units are exempted from Goods and Service Tax ( GST ) under the Reverse Charge Mechanism ( RCM ) for Specified Services if they furnish a Letter of Undertaking ( LUT )/Bond.
The CBIC clarified that a unit in SEX or the SEZ developer can procure such services, where they are required to pay GST under reverse charge, without payment of integrated tax provided the actual recipient, i.e. unit in SEZ or SEZ developer, furnishes a Letter of Undertaking in place of a bond as specified in condition no. (i) in para 1 of Notification No. 37/2017 âCentral Tax dated 4.10.2017.
The Gujarat Authority of Advance Ruling ( AAR ) has ruled that Goods and Service tax ( GST ) exemption is not available to Zero Liquid Discharge ( ZLD ) treated water and 18% GST is applicable.
The AAR comprising Amit Kumar Mishra and Milind Kavatkar has observed that the water obtained from the CETP, which has further undergone the processes of ultra-filtration and reverse osmosis in the ZLD plant, has a small amount of dissolved minerals and chemicals and is virtually free from all types of toxic materials. The AAR held that the âtreated waterâ obtained after undergoing the process through CETP and the ZLD plant is classifiable under Chapter 2201 and is taxable at the rate of 18% GST.
The Gujarat Authority of Advance Ruling ( AAR ) has ruled that Mix Mukhwas and Roasted Til & Ajwain are a Mixture of Products and liable to pay 5% Goods and Service Tax ( GST ). It was held that the products âMix Mukhwasâ and âRoasted Til & Ajwainâ prepared and sold are covered by Tariff Item 12074090 of the Customs Tariff Act, 1975.
The AAR held that the products âMix Mukhwasâ and âRoasted Til & Ajwainâ prepared and sold are covered by Tariff Item 12074090 of the Customs Tariff Act, 1975. The products âMix Mukhwasâ and âRoasted Til & Ajwainâ prepared and sold are covered by entry no. 70 of Schedule I of notification No. 1/2017-CT(R) dated June 28, 2017 and taxed at the rate of 2.5% CGST, 2.5% SGST, or 5% IGST.
The Authority for Advance Rulings ( AAR ) in Karnataka ruled that the services provided by individual truck owners for transport of raw materials and finished goods, including loading and unloading, are liable to GST and fall under the category of the Goods Transport Agency ( GTA ).
AAR noted that while a consignment note is not explicitly defined under the GST Act or the relevant notification, they relied on the explanation provided under the erstwhile Service Tax Rules, 1994, which define a consignment note as a document issued by a transporter containing details of the consignment, consignor, consignee, place of origin, destination, etc.
The Tamil Nadu Authority for Advance Ruling ( AAR ) ruled that Free on Board ( FOB ) exporters under the Reverse Charge Mechanism ( RCM ) basis wouldnât be liable for Goods and Services Tax ( GST ) as they are not involved in arranging the freight.
The Authority observed that âin the instant case of exports on a FOB basis, the exporter (applicant) is not at all involved in any way with the âexport freightâ, as the same is to be arranged by the overseas buyer themselves or through his agent. We further find that the exporter is neither the provider nor the recipient of service relating to âexport freightâ. Therefore, the question of payment of GST on an RCM basis on the export freight on the FOB basis of exports by the exporter (M/s. DCW Ltd.) does not arise.â
The Karnataka Authority for Advance Rulings (AAR) has classified a honey bee feed product under HSN code 1702.90, attracting an 18% GST rate.
The AAR concluded that âBee-Prime Feedâ falls under HSN 1702.90 and attracts an 18% GST rate as per entry number 11 of Schedule III to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. The ruling clarifies that the product is not covered under the general description of animal feed but rather as artificial honey due to its composition and use.
The Karnataka Authority for Advance Rulings (AAR) has ruled that an advance ruling on Input Tax Credit (ITC) cannot be sought if proceedings are already pending under any provisions of the GST Act. This ruling aligns with the first proviso of Section 98(2) of the CGST Act 2017.
The bench, comprising M.P Ravi Prasad and Kiran Reddy. T, ruled that the application was not maintainable due to a pending Show Cause Notice (SCN) issued by the department for the same ITC claims. Section 98(2) of the CGST Act, 2017 disallows admitting applications where the raised questions are already under consideration in ongoing proceedings against the applicant under the Act.
The Tamil Nadu Authority of Advance Ruling ( AAR ) has ruled that input tax credit ( ITC ) is not admissible on rotary car parking systems. The authority observed that the Rotary car parking system is an infrastructure with the aim of catering to the need for greater urban density and compactness in cities and to make better use of scarce land.
The AAR bench comprising D. Jayapriya and A. Valli observed that the Rotary car parking system provides additional space to park the vehicles depending upon the number of storeys built or preferred. The constituent parts/ or components of the rotary car parking are observed to be analogous to those of building blocks utilized in the construction of multi-story conventional car parking. Hence, the rotary car parking system is nothing but a civil structure.
The Authority for Advance Rulings (AAR) has ruled that a mobile application connecting service providers with potential customers qualifies as an âe-commerce operatorâ under Section 9(5) of the Goods and Services Tax Act, 2017 (GST Act). Consequently, the platform is liable to pay GST on notified services booked through their app.
The AAR bench observed that the applicant facilitates the partner or service provider in supplying their service to the end user by making use of the app maintained by them and enabling the user to get door-step service. Hence, the applicant squarely fits into the definition and qualifies to be an electronic commerce operator.
The Authority for Advance Ruling (AAR), Tamil Nadu, ruled that processed frozen shrimps, when packed in individual printed or plain pouches or boxes, fall under the âpre-packaged and labelledâ category. This classification has significant implications for exporters, as it brings these products under the ambit of the Goods and Services Tax (GST).
The AAR observed that âboth the entries relate to goods other than fresh and chilled, the only distinction being whether the goods are âpre-packaged and labelledâ, or other than âpre-packaged and labelledâ. Hence, the point for determination herein is as to whether the supply of specified pre-packaged and labelled frozen shrimp meant for export would fall within the meaning of the definition of âpre-packaged and labelled commodityâ under the Legal Metrology Act, 2009, and the rules made thereunder, as defined under explanation (ii) of the respective notificationsâ.
The Tamil Nadu Authority for Advance Rulings ( AAR ) held that the Goods and Services Tax ( GST ) is not leviable on the sale of goods warehoused in third-party Free Trade Warehousing Zone ( FTWZ ) on an âas is where isâ basis to customers who clear the same to a bonded warehouse under the Merchandise Warehouse and Withdrawal for Re-export ( MOOWR ) Scheme.
The AAR observed that âthe instant case of the applicant, where the imported goods stored in a third-party FTWZ warehouse, is being moved to the Bonded Warehouse ( MOOWR ) on effecting a sale to an OEMâs MOOWR unit, taxes under GST are not leviable, as the transaction gets covered under clause 8(a) of the Schedule III of the CGST Act, 2017, which reads as âSupply of warehoused goods to any person before clearance for home consumptionâ.
The Karnataka Authority for Advance Rulings ( AAR ) held that the rate of 18% of Goods and Services Tax ( GST ) is applicable on supply of âEDF Thrusters with Battery Pack for Jet Suitâ.
The bench of the authority, comprising M.P. Ravi Prasad and Kiran Reddy T, observed that the electric-ducted fan (EDF) thrusters based Jetsuit apparently derives support in the atmosphere by generating thrust against the earthâs surface. Hence, they are not covered in the definition of âaircraftâ, and the contention of the applicant that the jetsuit is an aircraft and the EDF thrusters with battery packs are part of an aircraft, which is subject to GST at a rate of 2.5%, is not acceptable.
The Rajasthan Appellate Authority For Advance Ruling ( AAAR ) dismissed the appeal as withdrawn. It was found that the question of the classification of goods and services was clarified by a notification issued by the GST Council.
The Appellant vide email dated 07.02.2024 stated that the GST Council had issued clarification and notification in respect of the question on which Advance Ruling was sought by the Appellant. Therefore, they have withdrawn their appeal. In light of the withdrawal of the Appeal by the appellant himself, the AAAR comprises of Mahendra Ranga, Member ( Central Tax ) and Dr. Ravi Kumar Surpur, Member ( State Tax ) dismissed the appeal.
In the case of the Board of Secondary Education Rajasthan, the Rajasthan Appellate Authority for Advance Ruling ( AAAR ) set aside the ruling by the Advance Authority for Rulings ( AAR ) and remanded the matter for fresh consideration. The AAR dismissed the application of Advance Ruling stating that the applicant is not a supplier of goods or services. The case was on the applicability of exemptions under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 regarding services provided to educational institutions, particularly in the context of conducting examinations.
The AAAR Comprising Mahendra Ranga and Dr Ravi Kumar Surpur found that the AAR erred in law by rejecting the application solely on the ground that they are recipients of service and do not fall under the definition of Applicant as can be understood from the High Court of Calcutta Judgement that definition of Applicant is quite broad. The authority set aside the Ruling of AAR, Rajasthan and remanded the matter back to the AAR to decide the application afresh.
The Rajasthan Appellate Authority for Advance Ruling ( AAAR ) directed the Authority for Advance Ruling ( AAR ) to pronounce rulings after considering the contentions of the appellant.
The Advance Ruling was pronounced on 27.09.2021 based on an amendment which was not operational as on the date of pronouncing Ruling. The appellant avers that such a Ruling is not sustainable and deserves to be quashed. The AAAR set aside the Ruling of the AAR, Rajasthan and remanded the matter back to AAR to decide the application de-novo after considering all the contentions of the appellant.
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