TMI Blog2018 (11) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2.5% SGST). Ruling:- There being a single contract for all above supplies of goods services and as the said contract comprises of two or more supplies (i.e. transportation, supply of packing material incentives) and one of which is principal supply i.e. custom milling of paddy, it shall treated as composite supply. The tax liability on a composite supply shall be decided as a supply of such principal supply under N/N. 31/2017-CT(R) N/N. 11/2017-CT (Rate) dated 28-06-2017 serial No. 26. (c), vide state notification no. F-10-82/2017/CT/V(146) dated 13.10.2017 i.e. 5%. - STC/AAR/05/2018 - - - Dated:- 10-10-2018 - SHRI S.K. BUXY AND SHRI RAJESH KUMAR SINGH, MEMBER PROCEEDINGS [U/s 98 of the Chhattisgarh Goods Services Tax Act, 2017 (herein- after referred to as CGGST Act, 2017)] The applicant M/s. Taranjeet Singh Tuteja Brothers, Opp. Savitri Rice Mill, Sahdeopali, Tehsil-Pussore, Dist Raigarh (C.G.) 496001 (GSTIN-22AABFT3379G1ZA) has filed the application U/s 97 of the Chhattisgarh Goods Services Tax Act, 2017 requesting advance ruling regarding tax liability in the business of job work activity of custom milling of paddy involving milling activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MARKFED. VIII. As per the guidelines of Chhattisgarh custom milling order, 2016 and letter no. F-4-6/Food/2016/29/2436, dated 23-10-2017 of Department of Food, Civil Supplies and Consumer Protection, Mantralay, Raipur, a Contract no. AC112017410015 has been executed on 16-11-2017 (Thursday), between District Marketing Officer, Raigarh on behalf of MARKFED and Shri Kanwalpreet Singh Tuteja, (Partner of M/s. Taranjeet Singh Tuteja Brothers), the applicant, Mill Registration No. MA 411505 for the custom milling of paddy for the year 2017-18 has been granted to them. As per the terms and conditions of this Contract the details of fees for individual job work is as under:- Sr.No. Particulars of Activity Consideration 1. Transportation of paddy from primary co-operative societies/paddy storage center to the place of miller (applicant s place) On per K.M. basis as fixed by the Sate Govt. of Chhattisgarh. 2. Custom milling charges of paddy @10/- Per Qtl. of paddy as milling charged + @30/- to @4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 31/2017-CT(R) Notification no. 11/2017-CT (Rate) dated 28-06-2017 Serial No. 26. (c) The incentive as decided by the State Govt. of Chhattisgarh and given by the MARKFED should be considered as subsidy and not be included in taxable value under Section 2(31) of the CGST Act 2017 and should not be included in consideration of milling charges. (d) The Rate of tax on usage charges of Gunny Bags should be taxable at 5% GST as applicable on supply of gunny bags. Two exempt supplies i.e. transportation of paddy, rice and incentive amount should be individually computed while determining composite supply for the job work of rice milling and packing materials gunny bags supply. According to section 8(a) which defines composite supply, two or more taxable supplies attracts tax liability. No tax liability should be charged on the amount received from other exempt supply as per their contract. Thus, the applicant has highlighted two major points, thereby opining that the amount received on account of job work of rice milling and supply of packing material gunny bags (as per contract) will attract GST @5% and that the amount received for transportation of rice as well as paddy and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competition within a larger institutional structure). Subsidy A subsidy is a benefit given to an individual, business or institution, usually by the government. It is usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy. iv. Thus it gets amply clear from the above that the subsidy is related with State welfare of the public or it is provided to a person or a business by various Government, Non Government agencies, to rationalise the cost impact directly/indirectly on the public. On the other hand the incentive is provided to a specific person or business for recognition of noble work or to provide motivation for a specific work. The applicant has mentioned about incentive amount apart from the milling charges for custom milling as per the contract with the MARKFED. This contract nowhere mentions about the I subsidy . Subsidy necessarily is extended in the larger interest of public at large. The contention of the applicant regarding the tax liability on the incentive a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ):- principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary Section-2(78):- non-taxable supply means a supply of goods or services or both which is not leviab/e to tax under this Act or under the Integrated Goods and Services Tax Act; Section-8 Tax liability on composite and mixed supplies: The tax liability on composite or a mixed supply shall be determined in the following manner, namely:- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; Thus it is clear from the above provisions that the service supply of custom milling by the applicant to the MARKFED is principal supply. As per section 8(a) all the receipts of principal supply, being composite supply, would attract 5% GST including the amount received from the transportation of paddy and rice. (c) Under composite supply, two or more taxable supplies and amount of exempt supply cannot be severed or artificially vivisected. In this conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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