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2020 (11) TMI 1084 - AUTHORITY FOR ADVANCE RULING, CHHATTISGARHLevy of GST - purchase of Biomass Power Plant (8 MW Capacity) by way of transfer of going concern through e-auction - serial no.2 of the Notification No.12/2017-Central Tax (Rote) dated 28/06/2017 - HELD THAT:- SCHEDULE II to Section 7 of the CGST Act supra, specifies about the Activities or Transactions which are to be treated as supply of Goods or supply of Services, wherein clause 4 (a) categorically stipulates that where goods forming part of the assets of a business are transferred or disposed of by or under the direction of the person carrying on the business so as no longer to form part of those assets, such transfer or disposal is a supply of goods by the person. Thus disposal of goods forming part of assets have been categorically stipulated under clause 4(a) of Schedule II to Section 7 of CGST Act, 2017 as supply of goods. Whereas, clause 4(c) of the said schedule II to Section 7 of the CGST Act, 2017 specifically stipulates that the transfer of a business as a going concern does not constitute a supply of goods. The transfer of a business as a going concern is tax-exempt under GST, whereas sale of assets as above being supply of goods will be out of the purview of exemption from tax, eventually having GST implications. Further, as per the sale notice issued by the appointed liquidator, for effecting sale of assets and properties owned by M/s. Vandana Vidhuyat Limited (in Liquidation) under Insolvency and Bankruptcy Coode, 2016, in addition to the Biomass Power Plant (8 MW Capacity) in question, sale of Thermal Power Plant-2x135 MW Capacity was also initiated and it is seen from the letter of intent issued by the liquidator, that the question had bid for the said Biomass Power Plant (8MW Capacity) only M/s. Vandana Vidhuyat Ltd. - whenever there is transfer of business as a Going concern, it shall involve transfer of goods and/or services. Whether the instant supply of sale of assets in entirety is to be treated as supply of woods supply of services con be determined in terms of the definitions of composite supply and mixed supply read with section 8 of the CGST Act 2017. Whenever there is transfer of business as a Going concern, it shall involve transfer of goods and/or services. Whether the instant supply of sale of assets in entirety is to be treated as supply of woods supply of services con be determined in terms of the definitions of composite supply and mixed supply read with section 8 of the CGST Act 2017 - in case the transfer of business as a going concern involves a supply of sate of assets which deserves treatment as principal supply as defined above and that supply is of goods, then the sale of assets as a going concern will have be treated as supply of goods by virtue of section 8 ibid and, therefore, the exemption provided under Notification no. 12/2017- Central Tax (Rate) will not be applicable, the exemption being only eligible to services of transfer of business as a going concern. In the instant case of the applicant, as elaborately discussed in the preceding pare, it is seen that acquiring of assets viz. Biomass Power Plant (8 MW Capacity) by way of sale of assets and properties owned by the Corporate Debtor, M/s Vandana Vidhyut Limited, in Liquidation forming part of Liquidation Estate formed by the Liquidator under Insolvency and Bankruptcy Code, 2016, through e-auction for a consideration is supply of goods and not supply of services in view of the stipulations under SCHEDULE II of Section 7 of the CGST Act, 2017. Thus, the instant sale of Assets and properties viz. Biomass Power Plant (8 MW Capacity) owned by Vandana Vidhyut Limited (in Liquidation), can in no way be supply of services. Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017, supra provides for exemption to intro-Slate supply of services by way of transfer of a going concern, as a whole or an independent part thereof, whereas here in the case of applicant the supply of biomass power plant is supply of goods and not supply of services in view of the stipulations under schedule II to Section 7 of CGST Act, 2017 - Applicant appears to have misconstrued the sale of Biomass power plant by way of sale as a going concern as supply of services whereas the same is supply of goods by way of transfer as a going concern, and have thus wrongly claimed eligibility towards exemption from GST under serial no.2 of Notification no. 12/2017-Central Tax (Rate) dated 28.6.2017. Thus on the basis of documents furnished by the applicant, we come io the considered conclusion that the instant transaction by the applicant is not eligible to the benefit of Notification No. 12/2017-Central Tax (Rate) New Delhi, the 28th June, 2017 supply of goods, attracting GST at the applicable rate. Exemption provided under serial no.2 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to the said intrastate supply of Biomass Power Plant (8 MW Capacity) as a going concern. GST at the applicable rate is leviable on the said supply.
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