TMI Blog2019 (8) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... t to maximum of rupees 5 Lakh allowed to the Demat account holder depositing Refundable interest free deposit would attract GST? - HELD THAT:- The first 10 free transaction allowed to the demat account holders are in the nature of discount and will not attract GST subject to the fulfillment of the conditions prescribed under Section 15(3) of the CGST GGST Act. - ORDER NO. GUJ/GAAR/R/9/2019 - - - Dated:- 15-5-2019 - R.B. MANKODI AND G.C. JAIN, MEMBER Present for the applicant: Mr. Paresh Sheth (Advocate) Mr. Yatin Gandhi (CFO-RNSB) Mr. Nishith Trivedi (Manager-RNSB) 2. M/s. Rajkot Nagarik Sahakari Bank Ltd, herein after called as The applicant or RNSB , has sought the advance ruling on following queries : i) In the facts and circumstances of the case whether Refundable Interest Free Deposit received could be treated as Supply under the provisions of Goods and Services Tax Act, 2017? And chargeable to tax in the hands of the applicant? ii) In the facts and circumstances of the case whether the amount of ₹ 2500/- being Refundable interest free deposit, which allows depositor same benefits, would attract GST? iii) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us to obtain Ruling on the said issue to avoid future litigation as also the liability. VIII. The applicant RNSB, as of now is operating the said schemes and is of the view that on such Refundable interest free security deposit or on free services being provided are not chargeable to GST under the provisions of Goods and Service Tax and has therefore approach this Honorable Authority for Ruling on the issues referred here in above. 2.3 Submission on the issue for Advance Ruling: a. The applicant RNSB submits that the Honorable Government after introduction of the Goods and Service Tax Act, 2017 has clarified that on free supply of either goods or services no tax would be payable. b. The applicant RNSB submits that to attract GST the transactions should be treated as supply as defined under the provisions of Section 7 of Goods and Service Tax Act, 2017 and one of the important criteria is that there should be consideration. Admittedly the Refundable Interest Free Deposits received is not a consideration for allowing any benefit under the said scheme in as much as the said amount is refundable at any time. However while refunding such amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; Section 9 of The Central Goods Service Tax Act, 2017 Levy and collection 1 Subject to the provisions of sub section (2), there shall be levied a tax called e Central Goods and Service Tax on all Intra-state supplies of Goods or Service or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rate... Section 15 of the Central Goods Service Act, 2017 Value of Taxable supply (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration for supply of goods or services and admittedly the applicant is neither adjusting refundable interest free deposit against any supply of services or against any free services. And as clarified in the comparative chart on closer of account, only such amount is adjusted which stands payable by the said account holder as also the process charge and on which the due amount of GST stands paid by the applicant. The Honorable Central Board Excise and Customs, in reply to one of the query on applicability of tax on free supply of replacement part under warranty has clarified that no GST is chargeable on such replacement since value of supply is deemed to be included in the value charged earlier. Though, this clarification is not directly applicable principally the board has clarified that where there is no consideration, no GST is payable. 2.5 Annexure A submitted by the assessee: 3. The Central Goods and Services Tax Additional Commissioner (Tech), Rajkot, vide their letter dated. 03.01.2019, gave their point wise comments are as under: (i) The activity in respect of which Advance Ruling has been sought is an Ongoing Acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Government or a State Government; (b) The monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; As can be seen, deposit is excluded from definition of the consideration by the provisio to Section 2(31) of CGST GGST Act, 2017. However, the notional interest/monetary value of the act of providing refundable interest free deposit will be considered as consideration. In our opinion it is covered in both the limbs of the definition of consideration. 1. Any payment made or to be made, whether in money or otherwise . It is included in the phrase or otherwise . 2. the monetary value of any act or forbearance It is included in the phrase the monetary value of any act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply if such discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if - (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. 5. In view of the foregoing, we rule as under R U L I N G Question1 : In the facts and circumstances of the case whether Refundable Interest Free Deposit received could be treated as Supply under the provisions of Goods and Services Tax Act, 2017? And chargeable to tax in the hands of the applicant? Answer 1: The monetary value of the act of providing refundable interest free deposit is the consideration for the services provided by the RNSB and therefore the services provided by RNSB can be treated as supply and chargeable to tax in the hands of the applicant Question 2: In the facts and circumstances of the case whether the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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