TMI Blog2022 (4) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... licable only when the supply of services does not qualify as an exempt supply vide entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. Further, whether the supply stands exempted or not in terms of entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, determination of value of the composite supply along with the value of supply of goods involved in the said supply is an essential element - applicant has filed the instant application seeking advance ruling on what is the value of supply of services provided by the applicant and also what components are to be included to determine the value of the goods. No ruling is given for the instant case since the questions raised in the instant application is a subject matter which is found to be pending in case of the applicant under the provisions of the GST Act. - Case Number 23 of 2021 Order number 22/WBAAR/2021-22 - - - Dated:- 29-3-2022 - MR. BRAJESH KUMAR SINGH, AND MR. JOYJIT BANIK, MEMBER Applicant s representative heard : Mr. Manish Raj Dhandaria, Authorised Representative Ms. Sakshi Jhajharia, Authorised Representative Preamble A per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under clause (b) and (c) of sub-section (2) of section 97 of the GST Act. 1.5 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act. 1.6 The officer concerned from the Revenue has raised no objection to the admission of the application. 1.7 The application is, therefore, admitted. 2. Submission of the Applicant 2.1 The applicant submits that he has entered into a contract with the Governor of the State of West Bengal represented by the District Controller of Food Supplies (hereinafter referred to as, the State Government) for conversion of wheat provided by the State Government and owned by the State Government, at all times, into wheat meal atta and fortify it by premixing of micro nutrients containing Iron 60 grams, Folic Acid 1.5 grams and Vitamin A for distribution by the State Government through Public Distribution System (for brevity, PDS), as entrusted under the Eleventh Schedule of the Constitution of India. 2.2 The applicant states that under the aforesaid contract, he shall obtain stock of wheat from the State Government. The ownership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Packing Charges 50.00 Transportation Handling Charges 28.70 Total 179.48 2.7 However, the cost of gunny bags is reduced from the amount of ₹ 179.48/- as the State Government considers the retention of gunny bags by the applicant as a non-monetary consideration. Therefore, the cash consideration paid by the State Government is ₹ 179.48/- reduced by ₹ 43/-, finally comes at ₹ 136.48/- per quintal. 2.8 The applicant submits that he is engaged in the provision of services to the State Government by way of an activity in relation to a 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. 2.9 The applicant submits that Notification No. 2/2018- Central Tax (Rate) dated 25th January, 2018 exempts 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 provided to the Central Government, State Government or Union territory or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is equivalent to the consideration not in money, if such amount is known at the time of supply; (c) if the value of supply is not determinable under clause (a) or clause (b), be the value of supply of goods or services or both of like kind and quality; (d) if the value is not determinable under clause (a) or clause (b) or clause (c), be the sum total of consideration in money and such further amount in money that is equivalent to consideration not in money as determined by the application of rule 30 or rule 31 in that order . 2.13 Hence, the value of non-monetary consideration shall be added to the value of supply along with the cash consideration received. Therefore, as per the provisions of Section 15 of the Act read with Rule 27 of the Rules, and based on the contract entered into, the value of supply shall be ₹ 179.48/- per quintal. 2.14 Relying on the clarification given in Circular No. 153/09/2021-GST dated the 17th June, 2021, the applicant submits that if the supply of services being undertaken by him doesn t get covered under Sl. No. 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 (as amended from time to time), such services shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% as clarified in para 3.2 of the Circular No. 153/09/2021-GST dated 17.06.2021 issued by the CBIC. 4.3 The issue is, therefore, required to be analysed considering the following aspects: (a) whether the value of supply of goods constitutes more than 25 percent of the value of the said composite supply or not; (b) whether the supply is made 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; 4.4 However, during the course of hearing, it has come to surface that a proceeding has been initiated in respect of the applicant by the Directorate General of GST Intelligence (DGGI) and the applicant, on being aggrieved by the summons issued under Section 70 of the Central Goods and Services Tax Act, 2017, has filed a writ petition before the Hon ble High Court at Calcutta. 4.5 The authorized representative of the applicant has furnished a written submission stating that no specific matter is pending or decided by the DGGI against the applicant since no show cause notice was issued and no demand order was passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion made earlier was ₹ 136.48 per quintal. In order to substantiate this figure along with the set off of gunny bags from the total value of consideration, the applicant has drawn attention to Memo No. 2538(3)- FS/Sectt./Food/4P-02/2016 dated 07.09.2018 and 569(3) - FS/Sectt./Food/4P-02/2016 dated 18.02.2022 respectively. The actual cost of the packing materials and vitamins fluctuate based on several factors. Therefore, there are concerns with respect to the periodicity of calculation of the values as well as the possibility of falling under different GST rate brackets in a given period. This could cause serious difficulty in accounting and determining the rate of GST applicable. Hence, it is submitted that the value of packing materials and vitamins must be considered as per the aforesaid memo defining consideration of packing charges at ₹ 50 per quintal and that of fortification charges at ₹ 10 per quintal. 4.7 The first proviso to sub-section (2) of section 98 of the GST Act speaks that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appears that there was a difference of opinion between the State GST authorities and Central GST authorities in respect of rate of tax applicable on the supply provided by the applicant. Though this issue has been clarified by the CBIC vide Circular No. 153/09/2021-GST dated the 17th June, 2021, the rate is applicable only when the supply of services does not qualify as an exempt supply vide entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. 4.13 Further, whether the supply stands exempted or not in terms of entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, determination of value of the composite supply along with the value of supply of goods involved in the said supply is an essential element. 4.14 The applicant has filed the instant application seeking advance ruling on what is the value of supply of services provided by the applicant and also what components are to be included to determine the value of the goods. We, therefore, fail to accept the contention of the applicant that the question raised in the application is not pending or decided in any proceedings in the case of an applicant under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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