Home Case Index All Cases GST GST + AAR GST - 2019 (9) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 824 - AAR - GSTClassification of services - agricultural produce - service of “logging” - forestry operation - plants grow up to become trees - they are harvested to yield timber, poles, billets, firewood, pulpwood, etc. which are raw material - levy of SGST and CGST Act - Is it legally correct to infer that the service of “logging” and its components described before do not attract any SGST under the CGST Act, 2017? If not, what is the correct position by law? - HELD THAT:- The term “agricultural produce” is crucial in the instant case. In common parlance it means growing of crops. The applicant submits in their application that the service being received by them yields timber, firewood etc.. However the yields of timber, firewood etc do not qualify as “agricultural produce” and are more specifically in the nature of “forest produce” - it is clearly evident that the activity of “Logging” does not yield agricultural produce and hence is not covered under entry number 24 of the Notification No. 11/2017 - Central Tax (Rate) dated 28th June 2017, effective from 01.07.2017. The services received by the applicant are of composite in nature and the principal supply is covered under sub-entry (ii) of entry no.26 of the Notification No. 11/2017-Central tax (Rate) dated 28.06.2017 which reads “Manufacturing services on physical inputs (goods) owned by others, other than (i) above” and taxable at 9% under the CGST Act and 9% under SGST Act. Similarly it is taxable at 18% under the IGST Act. In case the trees have grown from “plants” not planted by the Karnataka Forest Department, but that which grew by natural regeneration but were nurtured, managed and protected by the Karnataka Forest Department, does the same nil rate of SGST and CGST apply to them too? If not, what would be the rate? - HELD THAT:- The activity of the Government Corporation done to the Forest Department is independent of the nature of the activity involved in the growing of trees and hence what applies to the naturally grown trees applies to the trees which are nurtured, managed and protected by the Forest Department. In case of sale of forest produce or any other goods belonging to Karnataka Forest Department, where the buyer is registered or is based in and transports the goods to outside the State of Karnataka, what should be charged under the CGST Act, 2017, (A) SGST and CGST, or (B) IGST? - In case of sale of forest produce or any other goods belonging to Karnataka Forest Department, where the buyer is registered or is based outside the State of Karnataka, but uses the goods within the State of Karnataka, what should be charged under the CGST Act, 2017? (A) SGST and CGST, or (B) IGST? - HELD THAT:- Since the location of the supplier, [Department of Forests, Government of Karnataka is within the state of Karnataka], is Karnataka and the place of supply (as per the conclusion arrived in the preceding paragraphs), is also Karnataka, as per section 8(1) of the IGST Act, 2017, the nature of supply would be an “intra-State supply” within Karnataka State and hence CGST and SGST would be applicable on the transaction and not IGST - But, if the disclosure of destination is part of the supply contract and the contract makes it mandatory to issue transport permit to the place of such destination, then the place of supply would be the place of termination of movement of such goods and if both the place of supply and location of the supplier is within the same state, then it would amount to an “intra-State supply” and CGST and SGST would be chargeable. If the place of supply and the location of the supplier are in different states, then the transaction would amount to an “inter-State supply” and IGST would be chargeable. CGST and SGST must be charged as the place of supply and the location of the supplier are in the same State, in the reference transaction provided in the application.
|