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2022 (2) TMI 825 - AAR - GSTLevy of GST - promotional scheme of extra packs of cigarettes - taxable value which can be attributed to such extra packs of cigarettes for levy of GST - extra packs of cigarettes would be exempt supplies or free samples - applicability of provisions of Section 17(2) of the UPGST Act, 2017 read with Rule 42 of the UPGST Rules, 2017, or clause (h) of Section 17(5) of the UPGST Act, 2017 - HELD THAT:- The promotional scheme of additional 30 packs of cigarettes on every purchase of 100 packs of cigarettes for the payment of 100 packs of cigarettes is a taxable supply of 130 packs of cigarettes on the price of 100 packs of cigarettes. There would no tax liability on additional 30 packs of cigarettes supplied with 100 packs of cigarettes. Further, ITC shall also be available to the supplier for the inputs, input services and capital goods used in relation to Supply of goods or services or both as part of such offers. The provisions relating to 'supply' with respect to related persons and / or distinct persons are specifically covered within schedule I of the CGST Act, 2017 i.e. Activities to be treated as supply even if made without consideration. As per the said provisions, any supply of goods or services or both when made in the course or furtherance of business between the related persons or between the distinct persons, the same would be treated as supply even when the supply is made without consideration. As such, any transaction between the related persons or between the distinct persons, irrespective of the consideration, would be treated as 'supply' and hence taxable under GST. The cigarettes would not be supplied through sole distributor (i.e. related person) and in case of any divergence from the said disclosure (i.e. in case of supply to related person or distinct person), the ruling will be void ab-initio as per Section 104 of the CGST Act, 2017.
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