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2022 (4) TMI 1090 - AAAR - GSTBenefit of Concessional rate of tax - supply of HDPE Drums for use by the manufacturer of Ethyl Alcohol in his factory for packing his manufactured goods and supply to merchant exporter - bill-to ship-to model - applicability of N/N. 41/2017-IT (Rate) - HELD THAT:- In the GST regime, the government has provided special relief to the merchant exporters by way of reducing the GST rate for purchasing goods from domestic suppliers for export. Accordingly, Notification Nos 40/2017 Central Tax (Rate) and 41/2017 Integrated Tax (Rate) both dated 23-10-2017 stipulates that intra-state/inter-state supplies of taxable goods by a registered supplier to a merchant exporter shall be chargeable to GST at 0.05% (in the case of intra-state supplies) and 0.1% (in the case of inter-state supplies) subject to the fulfilment of the conditions imposed. It is a settled issue that benefit under a conditional notification cannot be extended in case of non-fulfillment of conditions and/or non-compliance of procedure prescribed therein. The basic rule in interpretation of any statutory provision is that the plain words of the statute must be given effect to. It is only in the case of ambiguity that the principle of strict/liberal interpretation would arise. In this case, there is no ambiguity in the wordings of the impugned Notification. The conditions required to be complied with by the registered supplier and the registered recipient are very clear and does not give any scope for interpretation. One must not lose sight of the fact that this Notification was introduced only to provide relief to merchant exporters under the GST regime. The merchant exporters have the option to avail the benefit of this concessional rate and export the goods under LuT and later claim refund of the concessional rate of tax paid on their procurements. However, they can choose to export the goods on payment of IGST in which case, they will not be eligible to avail the benefit of concessional rate of tax under this Notification on their procurements. The CBIC vide Circular No 125/44/2019 GST dated 18-11-2019 has also clarified that the benefit of supplies at concessional rate if tax in terms of Notification No 40/2017 Central Tax (Rate) and Notification No 41/2017 Integrated Tax (Rate) is subject to certain conditions and the said benefit is optional. The option may or may not be availed by the supplier and/or recipient and the goods may be procured at the normal applicable rate of tax. The Appellant is not eligible for the benefit of the concessional rate of tax in terms of Notification No 41/2017 IT (Rate) dated 23-10-2017 in as much as they have not complied with the conditions of the Notification - Appeal dismissed.
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