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 June 19, 2024 to August 10, 2024.
The Gujarat Authority of Advance Ruling (AAR) ruled that Mix Mukhwas and Roasted Til and Ajwain attract Goods and Services Tax (GST) at the rate of 5%.
It was noted that, âThe composition of both the products, in respect of which ruling is sought, clearly show that these products, mainly comprise of sesamum seeds i.e. 60% in respect of the first product and 97% in respect of the second product.â
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It was thus found that, âthe product is classifiable under chapter 12 of the Customs Tariff Heading, specifically CTH 12074090.â
In a recent ruling, the Gujarat Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) can be availed on capital goods in the form of wires/cables electrical equipment etc,630 mm square aluminium corrugated sheath/G cable line for installation of 66 KV feeder bay at the substation of GETCO) used for transmission of electricity from power stations of Distribution Companies (DISCOM) to factory premises.
The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that there is no provision under the Center Goods and service tax ( CGST ) Act, 2017 which bars availment of ITC by the applicant if subsequently the capitalised goods are handed over to Gujarat Energy âTransmission Corporation Ltd. (GETCO)/others.
The Uttar Pradesh Authority for Advance Rulings ( AAR ) clarified that GST is applicable only on supervision fees when the materials and installation costs are borne by the recipient. The ruling was made in the case of Uttar Pradesh Power Transmission Corporation Ltd.
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The two member bench of the tribunal comprising Harilal Prajapathi ( Member of AAR ) and Amit Kumar (Member of AAR) has observed that value of material and cost of execution work for installation of lines will be included in the value of supply for determination of taxable value under GST where all such cost are borne by the recipient of service and the applicant charge only supervision charges
The Uttar Pradesh Authority for Advance Ruling (AAR), ruled that supply of vouchers is considered taxable as goods, and the value of such supply should be determined in accordance with Section 15 of the Central Goods and Service Tax (CGST) Act, 2017.
The two member benches of the tribunal comprising Harilal Prajapati ( Member of AAR) and Amit Kumar ( Member of AAR) concluded that the supply of vouchers by the applicant are taxable at the rate of 9% CGST and 9% UPGST as per residual entry no. 453 of Third Schedule of Notification No. 01/2017-Central Tax (Rate) dt. 28.06.2017 (and similar notification under the UPGST Act). Further held that Value of supply of vouchers in the present case shall be decided as per sub- sections (1), (2) and (3) of Section 15 of the CGST Act 2017.
The Gujarat Authority for Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is not applicable on the amount recovered for canteen facilities from employees.
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The applicantâs case is that they employ more than 250 employees who have been provided with canteen facilities in terms of section 46 of the Factories Act, 1948. The applicant is on record that the canteen facility is being provided to supervised contract employees and third party employees apart from the permanent employees. The tribunal held that the deduction made by the applicant from the employees who are availing food in the factory would not be considered as a âsupplyâ under the provisions of Section 7 of the CGST Act, 2017.
The two member bench of the Gujarat Authority for Advance Ruling ( AAR ) has confirmed that Input Tax Credit ( ITC ) is eligible for Goods and Services Tax ( GST ) on canteen services provided to factory employees.
The tribunal hold that Input Tax Credit will be available to the appellant in respect of food and beverages as canteen facility is obligatorily to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963 as far as provision of canteen service employees working at the factory is concerned. It is further held that the ITC on GST charged by the canteen service provider will be restricted to the extent of cost borne by the appellant only.
The Gujarat Authority of Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) will be available to the appellant in respect of food and beverages as the canteen facility is obligatory to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963.
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The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that the applicants employ more than 300 employees who have been provided with canteen facilities in terms of Section 46 of the Factories Act, 1948. It was ruled that input tax credit (ITC) will be available to the applicant on GST charged by the service provider in respect of the canteen facility provided to its employees working in their factory as it was obligatory under the Factories Act, 1948, read with Gujarat Factories Rules, 1963.
The Tamil Nadu Bench of the Authority for Advance Rulings ( AAR ) has ruled that Goods and Services Tax ( GST ) Exemption Notification 04/2019 is not applicable for services of research and development supplied in relation to the âAgro-Chemicalâ Sector.
The authority stated that Notification No. 04/2019 Integrated Tax, dated September 30, 2019, is specific to the pharmaceutical sector. It does not cover research and development services supplied to the agro-chemical sector under agreements with foreign service recipients. There are no provisions to include the agro-chemical sector within the scope of this notification. The authority bench observed that the notificationâs language is clear and unambiguous, applying only to pharmaceutical research and development services
The Karnataka Authority for Advance Rulings (AAR) has ruled that the ride-hailing platform âRapidoâ is liable to pay goods and services tax for its cab services, a ruling that potentially adds to the ambiguity over GST applicability on app-based mobility companies operating the subscription model.
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The AAR Bench examined Rapidoâs operations, noting that the company owns and operates a digital platform facilitating the supply of passenger transportation services. The tribunal observed that Rapido fits the definition of an e-commerce operator as it manages a platform that connects drivers with customers.
The Karnataka Authority for Advance Rulings (AAR) has ruled that âPushti,â a powdered mixture of cereals, pulses, and sugar, is exempted from GST ( Goods and Services Tax).
The Court observed that the product âPushtiâ is a powdered mixture of cereals, pulses, and sugar. The Applicant sought clarification on whether their product can be classified as âpre-packaged and labeled,â thereby subject to taxation under entry No. 59 of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017, further amended by Notification No. 06/2022 Central Tax (Rate) dated 13.07.2022.
The Karnataka Authority for Advance Rulings ( KAAR ) observed the rent received from renting out building to the Department of Social Welfare for running boys hostel for weaker section is exempted from the GST ( Goods and Services Tax ).
The AAR Authority consisting of M P Ravi Prasad ( SGST Member ) and Kiran Reddy T( CGST Member ) considered the submissions and stated that the applicant is providing pure services to the state government related to functions under Article 243G of the Constitution. This falls under Entry No. 3 of Notification 12/2017 Central Tax ( Rate ) dated June 28, 2017, and is therefore not subject to GST.
The Karnataka bench of the Authority for Advance Ruling ( AAR ) has determined that the Retention Bonus, Joining Bonus, and work from home allowance, along with expenses under the Tuition Assistance Program (TAP), are exempted from Goods and Service Tax ( GST ).
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The bench noted that the recovery of retention bonuses, joining bonuses, work-from-home allowances, and TAP-related expenses occurs only if employees voluntarily exit before the stipulated duration. The intent of these incentives is to motivate employees to remain with the company.
The Karnataka Authority for Advance Ruling (AAR) determined that rent received from the Department of Social Welfare, Government of Karnataka, is exempt from Goods and Services Tax (GST).
The AAR observed that the service provided by the applicant qualifies for exemption based on two primary conditions. Firstly, the service is purely provided to the State Government. Secondly, the service is directly linked to a function assigned to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.
The Karnataka Advance Ruling Authority ( AAR ) has held that the security services provided to Bruhat Bengaluru Mahanagra Palike ( BBMP ) by a private limited company were not exempted from liability of Goods and Services Tax ( GST ).
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The bench consisting of M.P. Ravi Prasad (Additional Commissioner of Commercial Taxes) and Kiran Reddy (Additional Commissioner of Customs & Indirect Taxes) was of the opinion that the security services provided by the applicant to BBMP do not fall under the function entrusted to a panchayat under article 243G of the Constitution or in relation to any function entrusted to a municipality under article 243W of the Constitution of our country.
The Chennai Authority for Advance Ruling held that the supply of Residential Flat Construction service which involving the Transfer of Undivided Share of Land can attract 8% Goods and Services Tax.
According to the Notification dated April 2019, the applicant was given the chance to opt either for the new rate or old rate , without claim of input tax credit or with claim of input tax credit respectively. The applicant believed that his project is an RREP project, so the rate applicable to them will be 8% in case of output liability according to the notification dated 28.06.2017 but which was amended by notification dated 29.03.2019.
The Karnataka Bench of the Authority for Advance Ruling (AAR) has ruled that the professional services for assistance in filing of corporate tax returns provided to Bangalore Water Supply and Sewerage Board (BWSSB) is not an exempt supply as per Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
The authority observed that BWSSB did not qualify as a Local Authority as it was not vested with the control or management of a municipal or local fund. Consequently, BWSSB was neither a State Government nor a Local Authority, failing the first condition for exemption.
The applicant Metropolitan Transport Corporation [Chennai] Limited is a Government of Tamil Nadu carrying out the business of providing passenger transportation services. According to Goods and Services Tax Laws, this primary business activity of the applicant falls under the exempted category.
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The division bench of D.Jayapriya and A. Valli observed that the applicant had rented out the premises owned by them to RTO, Chennai as per the lease agreement. As per the agreement there exists no ambiguity regarding the applicability of GST on the differential rent amount due to upward revision of rent.
The Chennai Authority for Advance Ruling (AAR) ruled that Goods and Services Tax (GST) Input Tax Credit (ITC) on Contract Services can be availed by Information Technology (IT) and Information Technology Enabled Services (ITeS) Suppliers for Healthcare Sector.
After all the issues raised by the applicant, the bench find that for the availment of ITC is governed by the provisions of Section 16 & 17 of the CGST Act, 2017 and Section 16 provides for the eligibility and conditions for taking ITC, Section 17 deals with the apportionment of credit and blocked credits
The Tamil Nadu Advance Ruling Authority (AAR), held that the value of âDeposit Contribution Worksâ (DCW) under self-execution schemes is to be restricted to the establishment and supervision charges and other charges if received from the recipient.
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The bench remarked that the execution of DCW (Deposit Contribution Works) does fall within the scope of supply, although it is very dependent on who or which party executes it. In this regard, the distinction between the nature of transactions engaged under DCW and under âDCW â Self-execution modeâ is quite important in the context of this case.
The Tamil Nadu Advance Ruling Authority (AAR) in a recent judgment held that the purchase of raw effluent and the supply of treated output could be considered the sale of goods.
The bench, comprising of D. Jayapriya (Additional Commissioner/ Member CGST), and M. Valli (Joint Commissioner/Member (SGST), held that, regarding the suggested method of acquiring raw effluent, handling it independently, and providing output at market rates, it is accurate to classify the output supply as a âsale of goods.â
The Kerala Authority for Advance Ruling ( AAR ) has provided much-needed clarity on the Goods and Services Tax ( GST ) rates applicable to road and bridge construction contracts awarded by the Kerala State Transport Project ( KSTP ). The ruling addresses the uncertainty faced by contractors, including M/s. Sreedhanya Construction Company, regarding the applicable tax rates for such contracts.
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The AAR explained that for works contract services provided to KSTP, if the time of supply, as determined in accordance with Section 14, falls before July 18, 2022, the applicable GST rate would be 12%. Conversely, if the time of supply falls on or after July 18, 2022, the applicable GST rate would be 18%. This ruling provides essential guidance for contractors working with KSTP and other similar government projects, ensuring compliance with the correct GST rates.
The Kerala Authority for Advance Rulings ( AAR ) has clarified that the differential dealer margin provided by petroleum companies to their retail dealers constitutes a taxable supply of service under the Goods and Services Tax ( GST ) regime, taxable at the rate of 18%.
The AAR noted that this margin is provided when sales volumes decrease below a mutually agreed level to ensure the dealership remains operational. Thus, the margin falls under clause (e) of Sl. No. 5 of Schedule II of the CGST Act and is taxable under GST. The AAR further clarified that Section 15(3) of the CGST Act, which deals with the value of taxable supply and discounts, is not applicable in this case. The taxable supply in question is the service of refraining from an act, not the sale of petrol or diesel. As per the GST law, the service of âagreeing to refrain from doing an actâ is classified under Heading 9997 and is taxable at 18% GST (CGST 9% and KSGST 9%).
The Tamil Nadu Authority for Advance Ruling ( AAR ) has clarified that health insurance services provided by United India Insurance Company Limited to the Tamil Nadu State Government ( TNSG ) are exempt from Goods and Services Tax ( GST ) under S.No.40 of Notification No.12/2017 Central Tax (Rate).
Regarding reinsurance, the AAR ruled that services provided by foreign reinsurers are exempt from GST. The tax liability under the Reverse Charge Mechanism (RCM) is not applicable in this case for foreign reinsurers as the services are deemed exempt. The ruling confirms that reinsurance services received from foreign reinsurers are exempt from GST, thereby negating the need for the applicant to discharge GST under RCM for these services.
In a recent Judgement, the Karnataka bench of the Authority for Advance Ruling ( AAR) refused to decide on the input eligibility for renting commercial property, stating that the matter is sub judice and pending before the Supreme Court.
The Authority for Advance Rulings (AAR) has reviewed the submissions made by the Applicant and considered the relevant facts, arguments, and representations presented during the hearing. The AAR bench, consisting of M.P. Ravi Prasad and T. Kiran Reddy, noted that the issues raised in this application are identical to those addressed in the audit report. Consequently, the first provision to Section 98(2) of the CGST Act, 2017, applies to the current case, rendering it inadmissible.
The Maharashtra Authority for Advance Ruling ( AAR ) has ruled that sale of advertisement space on print media for Health and Education to municipal corporations are exempt from Goods and Services Tax ( GST ).
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The Authority bench of Ajaykumar V Bonde and Priya Jadhav noted that the words âany activity in relation to any functionâ used in entry at Sr. no 3 are very broad and shall not be confused with the words âdirectly in relation toâ, which are used for direct and proximate relationship. It was observed that, âit is mandatory to issue advertisements for recruitment, and therefore publication of such advertisements is ultimately mandatory for recruitment of doctors for constitutional functions, who in turn are necessary for providing health services. Government has used words âany activityâ in the notification, which also means that âthe activity of Selling of space for advertisement in print mediaâ is also covered in the entry.
The Kerala Authority for Advance Ruling ( AAR ) has ruled that counter sale of Pani Puri, Bhel Puri, Masala Puri and other chaat items like Masala Chat, Sev Puri, Samosa Chaat, Vada Pav, Pav Bhaji and Punjabi Lassi attracts Goods and Services Tax ( GST ) at 5%, when sold without a brand name.
The tribunal bench of Gayathri PG and Abdul Latheef K thus ruled that, âThe sales as mentioned above falls under âServices provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of foodâ falling under HSN 996331.â
The Authority for Advance Rulings ( AAR ), Maharashtra has clarified the tax exemption status for hostel accommodations provided by the society under Notification 12/2017- Central Tax ( Rate ) dated June 28, 2017
The authority asserted that, based on the duration of stay the supply of services can be divided into three broad categories: Duration of stay of 10 months. Duration of stay of one to two months during the vacation periods to new Students. Duration of stay of one to two months during the vacation periods for old students who have already stayed in a hostel for a duration of 10 months. Therefore, the question raised by the applicant was trifurcated in to 3 parts depending on the aforesaid duration of stay and its combinations and such 3 reframed questions were answered by the tribunal.
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.
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The AAR found that the Appellant is the recipient of various services. It was held that Section 95 of the CGST Act, 2017 allows the authority only to decide on matters or on questions about the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. It was found that the Appellant is not a supplier and are recipient of services supplied by various suppliers.
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 AAAR comprising of Sh. Mahendra Ranga, Member (Central Tax) and Dr. Ravi Kumar Surpur, Member (State Tax) observed that though the said amendment was retrospective, however, it was not passed by all state assemblies as well as it was not operational till the date when the Ruling was pronounced.
Recently, the Andhra Pradhesh bench of the Appellate Authority for Advance Ruling (AAAR) held that 28% GST is applicable on car seat covers if they serve the function of an essential and integral part of the seatâs assembly.
After examining the facts of the appeal, the AAAR bench of Mr Sanjay Pant and Mr Girija Shankar also held that the seat covers were indeed essential components of the car seats, permanently attached and integral to the seat assembly. The distinction between âpartsâ and âaccessoriesâ was examined, and it was concluded that these seat covers, while enhancing functionality and protection, remain an integral part of the seat assembly rather than mere accessories as they were designed in line with the carâs safety guidelines.
In a recent case, the Appellate Authority for Advance Ruling ( AAAR ) of Andhra Pradhesh held that only products containing Nitrogen, Phosphorus or Potassium should be classified as fertilizer for GST classification purposes.
After hearing the arguments, the bench of Mr Sanjay Pant and Mr Girija Shankar observed that the appellantâs products didnât contain even one of the essential fertilizer elements as given under GST law, ie, nitrogen, phosphorus or potassium, to qualify them as fertilizers. In light of this key observation the bench concluded that they are in agreement with the AARâs order and hence, upheld the same.
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