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TMI Blog2022 (1) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be engaged in the business of selling flour (atta) and providing service of job work in the nature of crushing food grains supplied and owned by Food & Supplies Department, Government of West Bengal. 1.3 The applicant submits that he has entered into an agreement with the District Controller of Food and Supplies, Kolkata, Government of West Bengal for supply of fortified Wholemeal Atta. According to the said agreement, the State Govt. (Food & Supplies Department) sends the whole, unpoli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on System (Maintenance and Control) Order, 2013 has been issued in exercise of power conferred by section 3 of The Essential Commodities Act 1955 and the same extends to the whole of West Bengal except the area where the West Bengal Urban Public Distribution System (Maintenance and Control) Order, 2013 is in force with Government of India Ministry of Consumer Affairs. 2.2 The West Bengal Urban Public Distribution System (Maintenance and Control) Order, 2013 has been issued in exercise of the power conferred by Section 3 of the Essential Commodities Act 1955 read with the Ministry of Consumer Affairs, Food and Public Distribution Department Order No. G.S.R. 630(E) dated 31.08.2001. It extends to the urban area of West Bengal. 2.3 The West Bengal Public Distribution System (Empanelment of Flour Mill and Milling of Fortified Atta/Wholemeal Atta) guidelines 2017 has been framed in pursuance of clause 36 and 37 of the West Bengal Public Distribution system (Maintenance and Control) Order 2013 and clause 33 and 34 of West Bengal Urban Public Distribution System and is in control 2013. Agreement herein means agreement made between the state government and owners of flour mills thereof i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Distribution System (PDS) by the State Govt. (Foods & Supplies Department). (d) By crushing 100 kgs of wheat, 95 kgs of flour and by -product in the form of 4 Kgs of Bran and 1 kg of refractor is generated. (e) The cash consideration paid for the senders of crushing is Rs. 136.48/-. (f) Further, the applicant also gets non cash consideration in the form of being allowed to retain 4 kgs of bran and 1 kg of refractor which is sold in the open market realizing Rs. 81. Further Rs. 43/- is realized by selling gunny bags which is used by the State Government for sending gunny bags to the applicant. (g) Therefore, total non-cash consideration is Rs. 124/-. (h) Details of cash and non-cash consideration is as below: - Flour Millers to be paid for crushing of 100 kg of Wheat Cost for of 95 Kg Atta (in Rs.) A Crushing Charges 90.78 B Fortification Costs 10 C Packing Charges 50 D Transportation & Handling Charges 28.70 E Consideration from sale of Bran (4" Rs. 20/Kg (Non-Cash) 80 F Consideration from sale of Refractors (1" Rs.l/kg)(Non-Cash) 1 G Total (A+ B+C+D+E+F) 260.48 H Less: Non-Cash Consideration I Less: Cost of 2 Gunny Bags -43 J Less: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cking material procured by him and thus he is making a bundled supply of the services of crushing of the grains along with supply of packing materials. They are supplied in conjunction with each other in the ordinary course of business as food grain cannot be transported without proper packing. It is, therefore, a composite supply of goods and services where services of crushing food grains is the principal supply and providing packing materials is ancillary to it. 2.10 The primary condition to be covered under the said entry of exempt supply reads as - "Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply ...". Accordingly, it is submitted by the applicant that in the instant composite supply, * Value of Supply of Goods = Fortification Charges + Packing Charges = Rs. (10 + 50) = Rs. 60 * Value of Composite Supply = Rs. 260.48 Therefore, value of supply of goods vis-à-vis value of composite supply is 23.03% which is much lesser than 25% as specified in the sl. no. 3A of the notification No. 12/2017- CT (R) dated 28.06.2017. 2.11 Distribution through PDS is covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flour under Public Distribution System is eligible for exemption under entry No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Alternatively, even if it is assumed without accepting that the aforesaid exemption is not available to the applicants, the services by way of job work in relation to all food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) is taxable at the rate of as 5% (CGST + SGST) vide Notification No. 11/2017- Central Tax (Rate). 3. Submission of the Revenue 3.1 The concerned officer from the revenue, in respect of admissibility of the application, has submitted that the points raised by the applicant regarding applicability of entry number 3A of Notification No. 1136 F.T. dated 28.06.2017 [Central Notification No. 12/2017- CT (R) dated 28.06.2017] in this case may be admissible if the goods supplied in such composite supply does not exceed 25% of the value of supply but the same requires ascertainment on case to case basis in view of CBIC Circular. In addition to this, the concerned officer from the revenue has not expressed any other view on the issue raised by the applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving thickness of 40 microns or above. It, therefore, appears that the activities undertaken by the applicant for milling of wheat into wheat flour, along with fortification and supplied upon packing of the same qualify the definition of 'composite supply' under clause (30) of section 2 of the GST Act where the supply of services by way of milling is the principal supply. 4.5 Now we take the issue to decide whether this composite supply is made in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. 4.6 The agreement between the applicant and the State Government for supply of fortified Wholemeal Atta/Atta is found to be executed in terms of G.O. No. 2834-F.S. dated 6th September, 2017. The said Notification provides guidelines for the procedure of empanelment of flour mills/ attachakki to convert wheat into fortified atta/wholemeal atta in pursuance of clauses 36 and 37 of the West Bengal Public Distribution System (Maintenance & Control) Order, 2013 and clauses 33 and 34 of the West Bengal Urban Public Distribution System (Maintenance & Control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bran and refractors : Rs. 81/-] = Rs. 260.48 4.11 The part of value of supply representing non-cash consideration towards crushing of 100 kgs of wheat as stated by the applicant and noted earlier in Para 2.5(f) refers that the applicant gets such consideration in the form of being allowed to retain 4 kgs of bran and 1 kg of refractor which is sold in the open market realizing Rs. 81. Further Rs. 43/- is realized by selling of 02 (two) gunny bags. 4.12 A composite supply shall qualify for exemption under entry serial no. 3A of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 upon fulfillment of following criteria: i) The supply has to be provided to Government/Local Authority/Governmental authority/Government Entity; ii) The supply has to be by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution; iii) The value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply. 4.13 In Para 3.2 of the Circular No. 153/09/2021-GST dated 17.06.2021 [CBIC-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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