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TMI Blog2021 (8) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... n be raised by a taxable person under Sec.34(3) of the CGST Act, 2017, for difference in rate of tax charged on tax invoice arising on account of objections raised by the proper officer that the rate of tax charged on tax invoice is lower than the applicable rate though not accepted by the taxable person, for the purpose of avoiding litigation and for buying peace, "as falling within the meaning of tax charged on tax invoice found to be less than the tax payable" and declare the details of such Debit Note in the return for the month during which such debit note is issued as provided in Sec.34(4) of the CGST Act, 2017 and pay / discharge the tax liability in such manner as may be prescribed? ii) Whether the Travancore Mats and Matting Co. (Bhavani Branch, GSTN 33AABFT8331N1ZY) can raise Debit Note, declare the details of the Debit Note in the return for the month during which such Debit Note is issued and pay / discharge tax liability in such manner as may be prescribed in the financial year 2020-21 u/s.34(3) & 34(4) of the CGST Act, 2017, on account of the objections raised by the proper officer that the rate of tax charged on tax invoice for branch transfer / supply to other cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of The CGST Act and the respective SGST Act and Section 5 of the IGST Act inter alia provide for levy of tax at such rate as may be notified by the Government. The charging sections under the CGST Act 2017 or IGST Act 2017 do not refer to HSN code in any manner. Thus, notifications specifying the rate of tax are issued under section 9 (1) of the CGST Act 2017 /corresponding SGST Acts and u/s 5(1) of the IGST Act 2017. 4.3. The basic Notification No. 1/2017-Central Tax (Rate) dated 28/06/2017, corresponding notification under State Acts and Notification No. 1/2017-integrated Tax (Rate) were issued notifying the rate of tax on supply of goods. A perusal of the said notification makes it amply clear that the notification issued under the charging sections 9 (1) of the CGST Act 2017 and under Section 5(1) of The IGST Act 2017, specify the rate with reference to/at, four-digit level of the First Schedule to The Customs Tariff Act 1975. 4.4. The First Schedule to The Customs Tariff Act has eight digits. The Customs Tariff Act is based on the harmonized commodity description and coding system and generally referred to as harmonized system or simply HS developed by the World Customs Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her customers. 4.7. Thus for the period 1st November 2017 to 30th April 2019, Bhavani Branch was charging 5% IGST on invoices of latex tufted coir floor coverings being coir mats & mattings for branch transfer to Head Office, Cherthala and supply to other customers. Just because they were paying taxes from 1St May 2019 at 12% on a voluntary basis, the benefit of Notification No. 34/2017 cannot be denied for the period 1st November 2017 to 30th April 2019. 4.8. However, the Senior Intelligence Officer, Directorate General of GST Intelligence, Coimbatore Zonal Unit objected to the levy of 5% IGST on transfer of Latex Tufted Coir Floor Coverings being coir mats and mattings and supply to other customers. 4.9. In the process of manufacture of Latex Tufted Coir Floor Coverings, coir yarn is tufted into the latex compound which is the base. Here the predominant raw material used for this product is coir yarn and the latex compound is only a base for tufting the coir yarn into the base. The charging sections under the CGST Act 2017 or IGST Act 2017 do not refer to HSN code in any manner. The notifications issued under the charging section 9(1) of the CGST Act 2017 and under section 5(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an/is entitled to take credit for Debit note so raised by Bhavani Branch. 5. Contentions of the Jurisdictional Officer: The jurisdictional officer submitted that the applicant is engaged in the manufacture and export of latex tufted coir mats and latex backed coir mats. The applicant has also a branch in Tamilnadu with separate registration. The returns filed by the applicant for the year 2017-18 has been scrutinised and found some difference in turnover reported in GSTR 3B and GSTR 9 and ASMT 10 notice has been issued accordingly. The applicant had remitted Rs. 8,78,617/- through DRC 03 and filed a reply and the case is now pending for finalisation. The jurisdictional office has not issued any notice regarding the difference in tax rate by which the application for advance ruling is filed. Therefore, they are not in a position to offer any remarks in the case as the office has not initiated any proceedings against the applicant regarding the difference of tax rate as stated in the application for advance ruling. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 06.01.2021. The authorised representative represented the applicant. He reiterated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts or circumstances supporting the original advance ruling have changed." 7.4. On a combined reading of the definition of the terms, advance ruling, applicant and the above provisions governing advance ruling under the CGST Act it is evident that an applicant can make an application for advance ruling if the following conditions are satisfied; (1) the applicant is either registered under GST law or is desirous of obtaining registration; (2) the matter or question pertains to any issue specified in Section 97 (2); (3) such a transaction is being undertaken or proposed to be undertaken by the applicant and the advance ruling is binding only on the applicant and the jurisdictional officer of the applicant. As the advance ruling is applicable only to the applicant and the jurisdictional officer of the applicant, the ruling is GSTIN specific and hence not applicable to distinct persons as specified in sub-section (4) of Section 25 of the CGST Act. 7.5. In the instant case the applicant has sought ruling regarding the circumstances or situations under which a debit note can be raised, the time limit within which the debit note is to be raised and the manner of reporting of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant is whether a debit note can be issued by the applicant for the difference of the rate of tax charged in the tax invoice as specified under section 34(3) of the CGST Act. The second question raised is whether the Bhavani branch of the applicant having GSTIN 33AABFT8331NlY in Tamilnadu can raise debit note for the difference of the rate of tax charged in the tax invoice issued to the applicant on the branch transfer and on supplies made by them to other customers. The Bhavani branch being a distinct person as per provisions of Section 25 (4) of the CGST Act is outside the jurisdiction of this authority and therefore the question raised pertains to an activity / transaction proposed to be performed by a registered person who is not within the jurisdiction of this authority. The third question is whether the applicant can avail input tax credit on such debit note raised by the Bhavani branch of the applicant which is dependent on the answer to the second question. 7.7. Thus, the questions raised by the applicant are not in respect of any matter specified in sub-section (2) of Section 97 of the CGST Act and also in respect of activity / transaction proposed to be performed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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