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2022 (9) TMI 203 - AAAR - GSTExemption from GST - composite supply of services - milling of food grains into flour to Food & Supplies Department, Government of West Bengal for distribution under PDS - Applicability of entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - Rate of tax, if the supply is not exempt - HELD THAT:- It has already been accepted by the WBAAR in its ruling IN RE: M/S. SHIV FLOUR MILL [2022 (1) TMI 303 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL], that the total value of composite supply will comprise both cash and non-cash considerations. The WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran. It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran. The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food & Supplies Department. This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 5 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future. The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials. So the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value. In the instant case the supply of fortified wholemeal flour to the Food & Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) and exempt from taxation. Appeal disposed off.
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