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2021 (5) TMI 1044 - AAR - GSTValuation of supply - water and electricity charges as well as the notional rent of the land, provided free of charge by BHEL CFFP to the applicant - to be included in the value of supply of oxygen gas by the applicant or not? - HELD THAT:- This authority has no doubt that Oxygen gas is emerged out as a new product by extracting it from the atmospheric air with the help of refrigerator, compressors, separators etc. and during this process electricity and water is constantly used. It is categorically stated that value of supply is the transaction value i.e. the price actually paid or payable for the said supply of goods and the price is the sole consideration for the supply. Further, value of supply shall also include any amount that the supplier Is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both - consideration includes any payment whether in money or otherwise made or to be made or monetary value of any act or forbearance for the inducement of the supply of goods. The value of supply is the price actually paid/payable and price is the sole consideration and consideration includes monetary value of any act or forbearance. In the instant case BHEL CFFP are providing rent free land and free electricity & water to the applicant and thus tolerating all the expenditure incurred on these free of cost items. Therefore, inputs provided free of cost by the recipient of resultant goods shall also form part of value of supply in view of Section 15(1) and Section 15(2)(b) of the Act as the cost of these inputs has to be paid by the supplier of goods but actually incurred by the recipient and this cost is also not include in the price actually paid/payable by the recipient - In the instant case also, BHEL CFFP are also providing rent free space alongwith free water & free electricity to the applicant for manufacturing & supply of Oxygen gas to them. The applicant has contended that the ownership of land, water and electricity remains with BHEL CFFP during all stages of the process till receipt of manufactured oxygen by it. In no circumstances, would the ownership of the said rent free space or water or electricity would pass on to the applicant. In such a case, all the said facilities provided by BHEL CFFP cannot be said to be a consideration for the applicant and thus, would not form part of the value of manufactured oxygen within the boundaries of Section 15(1) of the CGST Act. The value of rent free space alongwith free water & free electricity will form part of value of oxygen supply.
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