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2018 (10) TMI 299 - AUTHORITY FOR ADVANCE RULING, GUJARATClassification of goods - Rate of tax - Slate for Teacher’ - ‘Slate for Student’ - job-work - receipt of ‘manufacturing services on physical inputs (goods) owned by others’ by M/s. Raja Slates Pvt. Ltd. Held that:- From the technical specification of ‘Teachers’ Slate’ and ‘Students’ Slate’, we find that the same are clearly designed to be used for writing or drawing with slate pen and chalk. The material specified to be used in ‘Teachers’ Slate’ is Pine wood base MDF (Medium Density Fibre) and it should be without frame. The material specified to be used in ‘Students’ Slate’ is Pine wood base MDF (Medium Density Fibre) and it should be with Tinpatti Frame in four sides and both sides. Taking the technical specification of ‘Teachers’ Slate’ and ‘Students’ Slate’, as submitted by the applicant, and Explanatory Notes for Heading 96.10 of Harmonised System of Nomenclature, into consideration, we hold that the product ‘Teachers’ Slate’ and ‘Students’ Slate’ is appropriately classifiable under Tariff Heading 96.10. Rate of tax - Held that:- The product ‘Slates’ falling under Tariff Item 9610 00 00 is exempted from Goods and Services Tax vide Sl. No. 146 of Notification No. 2/2017Central Tax (Rate) dated 28.06.2017 issued under the Central Goods and Services Tax Act, 2017 and corresponding Notification issued under the Gujarat Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 (herein after referred to as the ‘IGST Act, 2017’), whereas the product ‘Boards, with writing or drawing surface, whether or not framed’ falling under Tariff Item 9610 00 00 is leviable to Goods and Services Tax @ 18% (CGST 9% + SGST 9% or IGST 18%) vide Sl. No. 448 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 issued under the CGST Act, 2017 and corresponding Notification issued under the GGST Act, 2017 or the IGST Act, 2017. It is now well settled principle of interpretation of statue that the word not defined in the statute must be construed in its popular sense, meaning ‘that sense which people conversant with the subject matter with which the statue is dealing would attribute to it’. It is to be construed as understood in common language. Whether the products manufactured and supplied by the applicant can be termed as ‘Slates’ as understood in common parlance, or otherwise? - Held that:- It is observed that in the document issued by the Gujarat Council of Elementary Education, the products have been referred to as ‘Slate for Student’ and ‘Slate for Teacher’. Thus, the products ‘Slate for Student’ and ‘Slate for Teacher’ are known as ‘Slates’ in common parlance and therefore are eligible for exemption from payment of Goods and Services Tax vide Sl. No. 146 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 issued under the CGST Act, 2017 and corresponding Notifications issued under the GGST Act, 2017 and the IGST Act, 2017. Levy of tax on job-work - appellant are getting some job work done on slates and when the main manufactured item is tax free - reverse charge mechanism - Held that:- As per clause 3 of Schedule II of the CGST Act 2017 and the GGST Act, 2017, ‘any treatment or process which is applied to another person’s goods is a supply of services’. Accordingly, applicable Goods and Service Tax on ‘manufacturing services on physical inputs (goods) owned by others’ is required to be paid - Further, as per clause (4) of Section 9 of the CGST Act, 2017 and the GGST Act, 2017 the Goods and Services Tax (Central Goods & Services Tax and State Goods and Services Tax) in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of the Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. In a case where registered person is recipient of taxable service of ‘manufacturing services on physical inputs (goods) owned by others’ from the supplier of such service who is not registered, the Goods and Services Tax is required to be paid under Section 9(4) of the CGST Act, 2017 and the GGST Act, 2017, subject to exemption, if any, available. Ruling:- The products ‘Slate for Student’ and ‘Slate for Teacher’ supplied by M/s. Raja Slates Pvt. Ltd. are appropriately classifiable under Tariff Heading 96.10. The products ‘Slate for Student’ and ‘Slate for Teacher’ supplied by M/s. Raja Slates Pvt. Ltd. are eligible for exemption from payment of Goods and Services Tax vide Sl. No. 146 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 issued under the CGST Act, 2017 and Sl. No. 146 of Notifications No. 2/2017-State Tax (Rate) dated 30.06.2017 issued under the GGST Act, 2017. In case of receipt of ‘manufacturing services on physical inputs (goods) owned by others’ by M/s. Raja Slates Pvt. Ltd. from the unregistered supplier of such service, the Goods and Services Tax is required to be paid by M/s. Raja Slates Pvt. Ltd. under Section 9(4) of the CGST Act, 2017 and the GGST Act, 2017, subject to exemption, if any, available.
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