TMI Blog2021 (8) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... t for packing of 1 Kg. of red gram dall supplied to the said Corporation are taxable or not? - HELD THAT:- The applicant himself admitted that there is no separate contract for supply of packing material. Moreover, the clauses of the contract in which the applicant entered with AP State Civil Supplies Corporation also reflect the same. The packing charges offered are nothing but incidental and ancillary to the main supply of milling and transportation of red gram dall. Therefore, it is a clear cut case of composite supply under Section 2(30) of CGST Act 2017. In the instant case, the custom milling is the principal supply, while the packing charges of ₹ 4.50 received by the applicant for packing of I Kg. of red gram dall supplied to the said Corporation constitutes ancillary supply. As seen from the agreement, it is a single contract of composite supply comprising of two or more taxable supplies like milling, transportation and packaging services. Out of which, milling is the principal supply and the rest of the supplies are liable to be taxed at the same rate of principal supply. - AAR No. 03/AP/GST/2021 - - - Dated:- 12-1-2021 - SRI. D. RAMESH, AND SRI. A. SYAM SUND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sent whole red gram to the applicant as per its convenience and availability. 4. Questions raised before the authority: 1. Whether the supply of red gram dall 2600 MTs by receiving 3823.529 MTs of indigenous red gram under barter system attracts any tax under GST? 2. Whether the packing charges of ₹ 4.50 received by the applicant for packing 1 Kg. of red gram dall supplied to the said Corporation are taxable? On Verification of basic information of the applicant, it is observed that the applicant falls under State jurisdiction, i.e. Vinukonda circle, Narasaraopet Division. Accordingly, the application has been forwarded to the jurisdictional officers and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. In response, no remarks are received from the jurisdictional officers concerned for which the Advance Ruling was sought by the applicant. 5. Applicant's Interpretation of Law and Facts: The applicant claims that he has not undertaken any treatment or process on the goods belonging to the Corporation and he did neither job work nor custom milling. The applicant submits that he has suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milling of whole red gram into dall is an intermediate production process as job work, covered by the above entry. Hence applicant also holds the view that no GST would be payable on milling charges if any (in any case there was no custom milling at all). The applicant further submits that for the purposes of Service Tax, Government of India have issued Notification No. 25/2012-Service Tax dated 20.06.2012 duly exempting certain services from the payment of service tax. Item No.30 read as follows:- 30. Carrying out an intermediate production process as job work in relation to (a) agriculture; Further in Circular No. 177/03/2014-ST in F. No.334/03/2014 dated 17.2.2014 the Central Board of Excise Customs has clarified as follows: - '5. Milling of paddy into rice: When paddy is milled into rice, on job work basis, service tax is exempt under si.no.30 (a) of exemption notification 25/2012-ST dated 20 June, 2012, since such milling of paddy is an intermediate production process in relation to agriculture.' It could be seen from the above clarification that milling of paddy is considered as an intermediate production process in relation to agriculture. Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aju Srinivasa Rao appeared in person for Virtual Hearing held on 28.10.2020 and he reiterated the submissions already made in the application and requested to pass necessary orders. 7. Discussion and Findings: We have examined the issues raised in the application. The taxability of the goods and services supplied or to be supplied, as governed under the provisions of respective GST Acts are examined. The Applicant is a miller cum transporter for lifting the red gram, milling and supply of resultant red gram dall to allotted places as per the instructions of the service recipient i.e. Andhra Pradesh State Civil Supplies Corporation. The supply involves the following services: 1. Lifting of Red Gram from the Godowns of the recipient and transportation to the dall mill. 2. Conversion of Red gram into dall (milling) 3. Packing the Red gram dall in the specified manner (In lKg.Packets under prescribed specifications with 50Kg secondary packing in new PP Bag) 4. Transportation of the same to the specified points. The applicant receives consideration for the above services, besides incidental charges of ₹ 498/- for un-milled Tur. The applicant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not eligible for exemption under S. No. 55 of Notification 12/2017-Central Tax (Rate) dated 28th June 2017 and corresponding notifications issued under IGST and UTGST Acts. 5. GST rate on services by way of job work in relation to all food and food products falling under Chapters 1 to 22 has been reduced from 18% to 5% vide notification No. 31/2017-CT(R) [notification No.11/2017-CT (Rate) dated 28.06.17. S.No.26 refers]. Therefore, it is hereby clarified that milling of paddy into rice on job work basis, is liable to GST at the rate of 5% on the processing charges (and not on the entire value of rice). Thus, the milling of Red gram fall under the Serial No.26 Heading 9988 (i) (f) of the Notification no.11/2017 Central Tax Rate dated 28.06.2017 and as amended from time to time and liable to tax @ 5%. Now we examine whether the packing charges of ₹ 4.50 received by the applicant for packing of 1 Kg. of red gram dall supplied to the said Corporation are taxable or not. The applicant himself admitted that there is no separate contract for supply of packing material. Moreover, the clauses of the contract in which the applicant entered with AP State Civil Supplies C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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