TMI Blog2024 (1) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... days from the date of issue of invoice. The term consideration has been defined in clause (31) of section 2 of the GST Act in an inclusive manner that extends the scope and range for mode of payment. Further, as per the said definition, it is immaterial whether the payment is made by the recipient or by any other person. Further, when there is barter of goods or services, the same activity constitutes supply as well as a consideration. For example, when a barber cuts hair in exchange for a painting, hair cut is a supply of services by the barber. It is a consideration for the painting received. Similarly, supply of painting is supply by painter and the painting is the consideration for hair cut. Thus, the settlement of mutual debts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 trading of footwear in the state of West Bengal in the brand name of Paragon . The applicant intends to manufacture footwear through independent outsource units under sale and buyback model where raw materials for production will be sold by the applicant to the outsourced vendors and the applicant wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant along with other materials as may be purchased from other suppliers. Thereafter the finished goods i.e., footwear will be supplied by the vendors to the applicant for which the vendors will also issue tax invoices. So, the business model will involve two distinct supplies. The first supply is to be made by the applicant to the outsourced vendors and the second supply will be made by the vendors to the applicant. 2.2 The applicant draws attention to the second proviso to sub-section (2) of section 16 of the GST Act, 2017 which provides that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously. Submission of the Revenue 3.1 The officer concerned from the revenue has refrained from offering any comment regarding this issue. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorized representative of the applicant during the course of personal hearing. 4.2 The applicant intends to enter with agreements with different vendors to whom he outsources the process of manufacturing of footwear/parts of footwear. In this process, applicant procures raw materials and supplies to those outsourced vendors raising tax invoices. In return, vendors make outward supplies of finished goods to applicant for which payment is settled through b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed . The aforesaid provision of the GST Act thus restricts credit of input tax to the recipient unless he pays the consideration to the supplier for inward supplies received by him along with tax payable thereon within the stipulated time of one hundred and eighty days from the date of issue of invoice. 4.5 The term payment has not been defined in the GST Act. In Senco Gold Ltd, [2019] 105 taxmann.com 143 (AAR-WEST BENGAL), the West Bengal Authority for Advance Ruling observed as follows: A payment is a transfer of an asset to the payee for dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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