Home Case Index All Cases GST GST + AAR GST - 2019 (6) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 1357 - AAR - GSTLevy of GST - Supply of extra packs of Cigarettes without recovering any additional cost from the Distributors - Promotional scheme for distributors - taxable value attributed to such extra packs of Cigarettes for of GST - exempt supplies or free samples - section 17 (2) of the CGST Act, 2017 read with Rule 42 of the CGST Rules, 2017 or clause (h) of Section 17 (5) of the CGST Act, 2017. HELD THAT:- Appellant are contemplating a promotion scheme for the clients/distributors wherein they intend to supply additional packs of cigarettes along with regular supply of cigarettes of a particular quantity, without receiving any additional consideration for the additional packs. Applicability of Circular No. 92/11/2019-GST dated 07.03.2019 issued vide F. No. 20/16/04/2018-GST - HELD THAT:- The Circular is clearly applicable to the facts of the subject application. From a reading of the above Circular and the facts of the matter i.e. the facts of the promotion scheme proposed by the applicant we find that their scheme of Buy 100 Get 10 free OR Buy 1000 Get 150 free” is clearly covered by Para B of the said Circular. Hence in such cases it will not be an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one. In the case of Buy 100 Get 10 free it will be 2 individual supplies, each of 100 packs and 10 packs for the price of 100 packs. In such a case taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of Section 8 of the said Act - 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 situation mentioned at Para(C) of the Circular mentions situations whether value discounts are envisaged and therefore will not be applicable in the subject case where value discounts are not contemplated - The situation mentioned at Para(D) of the Circular mentions situations where discounts are not known at the time of supply or where discounts are offered after the supply is over. In the subject case the discounts are known well before the supply is effected. Thus the extra packs of Cigarettes will not be leviable to GST - The extra packs of cigarettes will not be considered as exempt supplies or free samples and hence the provisions Of 17(2) read with Rule 42 of the CGST Rules, 2017 or clause (h) of Section 17 (5) of the CGST Act, 2017 will not be applicable.
|