9911796707
TMI Blog2020 (3) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and their agencies. 1.2 The Applicant purchase paddy from the arthias situated at various market committees within the state of Haryana and gets the same milled from rice millers. 1.3 The applicant enters into the contract with the rice millers as per the rates defined/ fixed by the Central Government. 1.4 As per the contract, rice millers are charged 12% per annum on daily basis in the form of interest for delay in delivery of milled rice as per the time prescribed in the contract which is recorded in the books of applicant as income in the form of holding charges. 1.5 The objective of this provision is to act as an inducement to due performance of a particular contractual obligation, or to regulate beforehand in an agreed and cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 1.8 As per the applicant, interest also known as holding charges are taxable supplies. 1.9 It falls under the HSN 999794. Agree to tolerate an act. The applicant is tolerating an act of delay in delivery of milled rice by the rice millers and is charging interest (holding charges) on the same. 1.10 To classify the said supply under HSN 999794, there are certain conditions to be met which are as follows: a. There must be an agreement. In the given case there is a mitten contract between the applicant and the rice millers. b. There must be benefit and obligation. The rice miller is availing benefit of enhanced period for the delivery of milled rice and it had an obligation under contract to provide the milled goods within specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The central tax in respect of the supply of taxable goods or services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification. (2) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable. (3) The Government may, if it considers necessary or expedient so to do for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation. -For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or (ii) a chartered engineer registered with the Institution of Engineers (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest (holding charges) on the same and not taking any legal recourse for the specific performance of the contract. 3.7 We agree with the contention of the party. The interest charged by the applicant for delay in delivery of milled rice as per the time prescribed in the contract is a supply of service under Para 5 (e) of Schedule II of Central Goods and Services Act 2017. 3.8 The service "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" falls under the HSN Classification 9794 and is a taxable supply. 4. Ruling: (i) The interest charged for delay in delivery of goods is taxable under Section 9 of CGST Act, 2017. (ii) The said service merits classification under HSN 999794. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
