Appellate Orders

The MAAAR while upholding the Maharashtra AAR Order held that the services rendered by the Applicant to M/s. Posco ISDC Pvt. Ltd. as a sub-contractor would not be classified as GTA service (SAC 996791) when the service rendered by M/s. Posco ISDC Pvt. Ltd. as the main contractor, was already classified as GTA service (SAC 996791) and which was going to remain unchanged. As regards the second question asked by the Appellant, it was further held that since the Appellant could not act as GTA in the proposed transaction, they were not entitled to charge 12 % GST on the forward charge basis, in terms of the Notification No. 20/2017-C.T. (Rate), dated 22.08.2017. As regards the question (iii) asked by the Appellant, it was held that since this question did not pertain to the Appellant, and that the proper person to ask this question would be M/s. Posco ISDC Pvt. Ltd., they refrain from answering this question in terms of the provisions laid under section 97(2) of the CGST Act, 2017. As regards the question (iv) asked by the Appellant, it was held that the said question was not covered under section 97(2) of the CGST Act, 2017, they do not have jurisdiction to pass any ruling in this matter.

The MAAAR held that the amount collected as membership subscription and admission fees from members was not liable to GST as supply of services.

The MAAAR held that they did not find any reason to amend our original order dated 17.02.2019, wherein it was held that the supply of the ElectroInk along with the other consumables comprising of blanket, photo imaging plate, binary ink developer, HP imaging oil, blanket web and other machinery products by the Appellant to its customers is ‘mixed supply’ and not the ‘composite supply’, as being claimed by the Appellant.

The MAAAR held that Input Tax Credit against the GST paid on the purchase, and fabrication of the motor vehicles, used for carrying cash and bullions, is available to the Appellant.

The MAAAR held that  the said supply is a taxable supply in the form of construction of complex/building/civil structure or a part thereof including a complexes or buildings for which consideration is received by the appellant in installments and therefore it is a composite supply of Works Contract covered u/s.2(119) of the CGST Act, 2017.

The MAAAR held as under:                      

Question: 1) Being a part of the Ministry of Defence, Government of India, whether our organization Ordnance Factory Bhandara is liable to pay GST on the following supply of services: -
a) Liquidated damages deducted from the payments to be made to suppliers in case of delayed delivery of goods or services.
b) Amount of Security deposit forfeited of suppliers due to non-fulfillment of certain contract conditions.
(d) Food and beverages supplied at industrial canteen inside the factory premises.
(e)Community hall (Multipurpose Hall) provided on rental basis to employees of our organization.
(f) School bus facility provided to children of the employees.
(g)Conducting exams for various vacancies.
Answer: The Appellant is not liable to pay GST in any of these abovementioned activities/transactions carried out by them.
 Question: 2) Whether Input Tax Credit on expenditure on the goods and services consumed   by our organization in following activities shall be available: -
a) Maintenance of garden inside the factory premises.
b) Maintenance and upkeep activities relating to gardens, parks, playground, factory school for children of employees, hall for recreational activities, residential quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the factory premises but within the factory estate.
c) Medicines purchased by the hospital maintained by our organization and used for treatment of factory employees and their dependents. Expenditure on maintenance, upkeep and other activities relating to such hospital.
d) Expenditure related to maintenance and upkeep of guest houses maintained by organization.
e) Expenditure related to purchase of LPG cylinders used within industrial canteen.
Answer: ITC in respect of the following input services are available to the Appellant:
(a)  Maintenance of garden inside the factory premises;
(c)  Medicines purchased by the hospital maintained by our organization and used for treatment of factory employees and their dependents. Expenditure on maintenance, upkeep and other activities relating to such hospital. 
ITC in respect of the following input services are not available to the Appellant:
(b) Maintenance and upkeep activities relating to gardens, parks, playground, factory school for children of employees, hall for recreational activities, residential quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the factory premises but within the factory estate.
(d)  Expenditure related to maintenance and upkeep of guest houses maintained by organization.
(e) Expenditure related to purchase of LPG cylinders used within industrial canteen.

The Maharashtra AAAR held that the proposed arrangement of supply of coal or any other inputs by the principal i.e. JSL to the Appellant i.e. JEL for generation of electricity would be construed as job work. Accordingly, no GST will be leviable on this supply. Further, the supply of power by JEL to JSL, being an exempt supply, will attract nil rate of GST. Finally, the job work charges payable to JEL by JSL will be subjected to GST in terms of the provisions laid down in Notification No.11/2017-C.T. (Rate) dated 28.06.2017 as amended by various subsequent notifications.

The Maharashtra AAAR held that the Appellant was eligible to take benefit of rule 32(5) for the products in TABLE 1 placed by them before us except items placed at 7 & 8.  They furhter held that they cannot give any ruling on items 7 & 8 and they agreed with the observations of the AAR on 7 & 8, that in absence of any specific description of the products contained in them, no ruling can be given.

The Maharashtra AAAR held that since the questions asked by the Appellant were not covered under the jurisdiction of the advance ruling, therefore, no ruling could be passed in the instant case.

The Maharashtra AAAR  amended the para 19 of the original AAAR Order No.  MAH/AAAR/SS-RJ/32/2018-19 dated 23.04.2019 in as much as the membership fee, collected by the Respondent from its members, will not construed as consideration for levy of GST; rather it is the registration fee, collected by the Respondent from its members for organizing the skill oriented workshops, will be construed as consideration against the supply made by the Respondent to its members, and accordingly will be leviable to GST, while maintaining that Lions Club of Poona Kothrud, on account of the activities i.e. organizing training programs/workshops for its members, is liable to  take registration for discharging their GST liability.