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2021 (8) TMI 524 - AAR - GSTLevy of GST on Barter transaction - Supply of red gram dall 2600 MTs by receiving 3823.529 MTs of indigenous red gram under barter system - packing charges of received by the applicant for packing red gram dall supplied to the said Corporation - Whether the activity of milling of whole red gram to red gram dall by the millers is liable to GST or not? - HELD THAT:- The applicant is appointed as "miller cum transporter", for the purpose of conversion of red gram whole to red gram dall @68% of outturn ratio. Hence, the argument of the applicant treating the activity under taken in the instant case, as 'barter system' is misconstrued. It is nothing but 'job work' carried out on the whole red gram supplied to the applicant. Thus, the milling of Red gram fall under the Serial No.26 Heading 9988 (i) (f) of the Notification no.11/2017 Central Tax Rate dated 28.06.2017 and as amended from time to time and liable to tax @ 5%. Whether the packing charges of ₹ 4.50 received by the applicant for packing of 1 Kg. of red gram dall supplied to the said Corporation are taxable or not? - HELD THAT:- The applicant himself admitted that there is no separate contract for supply of packing material. Moreover, the clauses of the contract in which the applicant entered with AP State Civil Supplies Corporation also reflect the same. The packing charges offered are nothing but incidental and ancillary to the main supply of milling and transportation of red gram dall. Therefore, it is a clear cut case of composite supply under Section 2(30) of CGST Act 2017. In the instant case, the custom milling is the principal supply, while the packing charges of ₹ 4.50 received by the applicant for packing of I Kg. of red gram dall supplied to the said Corporation constitutes ancillary supply. As seen from the agreement, it is a single contract of composite supply comprising of two or more taxable supplies like milling, transportation and packaging services. Out of which, milling is the principal supply and the rest of the supplies are liable to be taxed at the same rate of principal supply.
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