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TMI Blog2019 (3) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... GSTIN Number 19AAAC11681G1ZM, sought an advance ruling under the West Bengal Goods and Services Tax Ac, 2017/ the Central Goods and Services Tax Act, 2017 (hereinafter collectively referred to as "the GST Act") on the following question: "Whether or not GST paid on the railway freight for transportation of the refining crude petroleum oil, inter alia, High Speed Diesel (HSD), Motor Spirit (petrol) and Aviation Turbine Fuel (ATF) from its Haldia Refinery to its export warehouse at Raxaul can be availed as Input Tax Credit." 3. The WBAAR by order Advance Ruling No. 17/WBAAR/2018-19 dated 18.09.2018 = 2018 (9) TMI 1342 - AUTHORITY FOR ADVANCE RULING GOODS AND SERVICE TAX, WEST BENGAL pronounced that- "ATF and other non-taxable supplies from the Applicant's Haldia Refinery to the export warehouse of Indian Oil Corporation Ltd. at Raxual are not Zero rated supplies. They are non-taxable supplies from the Applicant to the Bihar Unit of Indian Oil Corporation Ltd, who are distinct persons in terms of Section 25(4) of the GST Act. The Applicant cannot claim credit of the GST paid on the railway freight for transportation of ATF and other non-taxable supplies from West Bengal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 5(c) of the agreement NOC is bound to furnish to the Appellant its requirement at least 30 days before the commencement of each quarter. (I) The WBAAR erred in holding the supply is not 'zero rated supplies' because the Raxual Warehouse is a distinct person under Section 25(4) of the CGST Act. The Raxual Warehouse is only a branch of the appellant and is not a distinct undertaking. It is regarded as a distinct undertaking or person for the purposes of compliance of the provisions of the GST Act. (J) If the effect of sale is to have the movement of goods from one State to another, an inter-State sale would ensue under Section 3(a) of the Central Sales Tax Act. The said Section 3(a) and its principals are clearly applicable also to sale in the course of export under Section 5(1) of the Central Sales Tax act as has been held by the Hon'ble Supreme Court. (K) The WBAAR erred in holding that the relevant goods cleared from the Halidia Refinery may be diverted for home consumption. The Appellant has submitted that the movement of goods from Haldia Refinery to its Raxual warehouse is only for the purposes of exportation to NOC, Nepal. The agreement and its covenants have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ME COURT OF INDIA (iii) English Electric Co. Of India Ltd v. CTO (SSC p. 464. Para 16) = 1976 (9) TMI 134 - SUPREME COURT OF INDIA (iv) South India Viscose Ltd v. State od T.N etc. = 1981 (7) TMI 204 - SUPREME COURT OF INDIA The judgment in the case of "Oil India Ltd v. Supdt of Taxes (SCC p. 737, Para 9) = 1975 (3) TMI 96 - SUPREME COURT OF INDIA" the Supreme Court held that "... No matter in which State the property in the goods passes, a sale which occasions 'movement of goods from one state to another is a sale in the course of interstate trade. ' The inter-State movement must be the result of a covenant, express or implied, in the contract of sale or an incident of the contract, it is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement. It is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter State movement must be specified in the contract itself It would be enough if the movement was in pursuance of and incidental to the contract of sale. 6. During the course of the hearing, the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion that transfer of ATF and other non-taxable supplies from Haldia Refinery to Raxaul Depot were not "Zero rated supplies" under section 16(1)(a) of the IGST Act but were exempted supplies from the West Bengal Unit to the Bihar Unit of the Appellant, being distinct persons in terms of section 25 (4) of the GST Act. (g) The Respondent further submitted as per clause 5.7 of the agreement, NOC can depute an independent surveyor at the supply point to cross check, verify, inspect the quality and quantity of the goods. Obviously if something negative is found on inspection, the goods will not be exported, but it may be diverted for purpose other than export. So movement from the appellant's factory at Haldia to the export warehouse at Raxaul was not, 'inextricably linked' to ultimate export to Nepal. (h) The Responded added that the Hon'ble WBAAR, rightly held that appellant, i.e. the West Bengal Unit of IOCL and IOCL's Raxaul Warehouse are distinct persons in terms of section 25 (4) of the GST Act. (i) It was submitted further that the Hon'ble WBAAR, rightly held in para 13 of the order No. 17/WBAAR/2018-19 dated 18.09.18 = 2018 (9) TMI 1342 - AUTH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and cognate expression, means taking goods out of India to a place outside India. 10. The defining character of an export transaction both under section 5(1) of the CST Act and section 2(5) of the IGST Act is that it occasions movement of the goods to a place outside India. 11. The goods are supplied to the recipient (in this case the Bihar Unit) in India as the movement terminates at Raxaul. In such cases it will be an inter-state supply to a distinct person as defined under section 25(4) of the GST Act, and the place of supply shall be determined under section 10(l)(a) of the IGST Act. 12. The IOCL, Haldia issued ARE-3 against CT-2 for stock transfer of said goods to their Raxaul Depot. It is IOCL, Raxaul Depot who prepares the ARE-I for export of the said goods to the NOC, Nepal. Hence, the movement of goods through ARE-3 terminates for delivery to the recipient IOCL, Raxaul Depot, who is a distinct person as per GST Act. The final clearance being made from the export warehouse at Raxaul, it is the Bihar Unit that is responsible for export on preparing ARE-I. Removal of goods without paying duty (under Bond) from Haldia Refinery to the export warehouse at Raxaul, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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