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2019 (3) TMI 538 - AAR - GSTClassification of goods - engine manufactured and supplied solely and principally for use in railways/locomotives - whether classifiable under HSN Heading 8408 or under HSN Heading 8607 of the Customs Tariff as a part used solely or principally for Railways or Tramway Locomotives or Rolling Stock? - Held that:- Circular No. 30/4/2018-GST dated January 25, 2018 has clarified that only the goods classified under Chapter 86, supplied to the railways attract 5% GST rate with no refund of unutilised input tax credit and other goods [falling in any other chapter], would attract the general applicable GST rates to such goods, under the aforesaid notifications, even if supplied to the railways. Therefore it is very important to classify subject engines, whether the same falls under Chapters 8408 or 8607 - Note 2 of Chapter 86 states that Heading 8607 applies to (a) axles, wheels, wheels sets (running gear), metal tyres, hoops and hubs and other parts of wheels, (b) frames, under frames, bogies and bissel-bogies, (c) axle boxes, brake gear, (d) buffers for rolling-stocks; hooks and other coupling gear and corridor connections, and (e) coachwork. Therefore it is crystal clear that Heading 8607 does not cover engines of any type - the goods classified under Heading 8607 are subjected for assessment on the basis of quantity cleared on weight basis whereas the goods classified under Heading 8408 are subjected for assessment on the basis of quantity cleared on number basis. This shows that the nature of goods classified under these two heads is inherently different from each other - thus, the subject engines manufactured and supplied for use in railway, locomotives are classifiable under HSN Heading 8408 and not under Heading 8607 of the Customs Tariff. Supply of services or not - Input tax credit - common input supplies on behalf of other unit/units registered as distinct person - allocation of the cost incurred for same to such other units qualifies as supply - levy of GST or not - Held that:- As per Section 25 of the CGST Act, 2017, “a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.” Hence the applicant and their various offices will be distinct persons - As per the provisions of Section 7 of the CGST Act, 2017 read with Sr. no. 2 in Schedule -I of the CGST Act, 2017, supply of goods or services or both between related persons or between distinct persons, when made in the course or furtherance of business is to be considered as supply. Hence, the applicant is required to pay GST on such supply made to their offices/branches having different registration numbers. If GST is leviable, whether assessable value can be determined, by arriving at nominal value? - Held that:- The provisions of Rule 30 of the CGST Rules, 2017 should be followed by the applicant to arrive at the assessable value. Requirement for Registration as Input Service Distributor (ISD) for distribution of ITC on common input supplies - they are already registered for supply of goods / services - Held that:- ISD is a facility available to persons/businesses having a large share of common expenditure and where billing/payment is done from a centralized location. The concept of ISD has been introduced to simplify the credit taking process for various assesses/businesses, etc, and the facility helps the concerned to have a smooth flow of input tax credit under GST - We have no doubt that the applicant wants to distribute common cenvat credit received by the HO for which payments/billings are done by them. If they want to distribute such credit than they will be an Input service Distributor. Once an ISD, then it follows that they must compulsorily obtain separate registration as an ISD. Hence we do not agree with the applicant's contention that the provisions of Section 24 (viii) of the CGST Act merely refers to the necessity of an independent registration if a person intends to avail the facility of ISD and does not create any stipulation as to necessity of availing the ISD facility itself.
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