Summary of Orders

GUJ/GAAR/R/2022/41 dated 28.09.2022

1. Whether GST would be payable on nominal & subsidized recoveries made by the Applicant from its employees towards –
   • Provision of canteen facility by 3rd party service provider to Applicant’s employees at Applicant’s premises.
   • Provision of bus transportation facility by 3rd party service provider to Applicant’s employees.
2. If the answer to any of the question above is yes, what is the applicable rate of GST thereupon?

Explanation

There is a contractual obligation on part of the employer to provide transport and canteen facility to employees. This cannot be treated as supply as per provision of schedule III and clarification issued via circular no 172/04/2022-GST dt 06.07.2022.

TN/31/AAR/2022 Dated: 29.07.2022

1. Whether the transaction of transfer of right to do integration testing, install and market software from Tamil Nadu cost centre to Karnataka Cost centre shall be leviable to GST given that such transaction is being executed between two cost centres of same entity.
2. If the answer to the above is affirmative then whether such supply be considered as goods or services?

1. The transaction of transfer of right to do integration testing, installation and marketing software from the applicant to Karnataka Cost centre of the company is leviable to GST.
2. The supply of such right is supply of services.

Explanation

1. GST is leviable on supplies made to distinct persons. The two cost centres represent 2 entities with different GST registrations making them distinct persons and hence GST is applicable.
2. Self Explanatory

TSAAR Order No. 49/2022 Dated: 14.07.2022

1. Whether GST exemption is applicable to applicants in respect of the pre and post Examination services being provided to the Educational Boards and Universities (including Open Universities)?
2. If the answer to Q.No.1 is affirmative, whether the exemption is available to the applicant in case of the services are provided on a sub-contract basis i.e., the applicant provides pre- and post-examination services to the main contractor who in turn provides the said services to the Educational Boards and Universities (including Open Universities)?

1. Yes, GST exemption applies to applicants in respect of the pre-and post-examination services being provided to the Educational Boards and Universities including Open Universities.
2. No, GST exemption is not available to the applicant in case of the services are provided on a sub-contract basis i.e., the applicant provides pre- and post-examination services to the main contractor who in turn provides the said services to the Educational Boards and Universities including Open Universities.

Explanation

1. Examination services provided to an Educational Institution is exempt from GST (Section 11 of CGST Act,2017)
2. Benefit of the exemption can be availed only when the services are provided to educational institution.
   In this case, the services are provided by a subcontractor to the main contractor. Therefore Benefit of exemption cannot be availed even if the services are ultimately related to an education institution.

GUJ/GAAR/R/2022/38 Dated: 10.08.2022

1. Whether GST shall be applicable on the amount recovered by the company, M/s Troikaa Pharmaceuticals Limited, from employees or contractual workers, when the provision of third-party canteen service is obligatory under section 46 of the Factories Act, 1948?

1. GST, at the hands of M/s Troikaa, is not leviable on the amount representing the employees portion of canteen charges, which is collected by M/s Troikka and paid to the canteen service provider.
2. GST, at the hands of M/s Troikaa, is leviable on the amount representing the contractual worker portion of canteen charges, which is collected by M/s Troikka and paid to the canteen service provider.

Explanation

1. Transaction covered under schedule III of CGST Act, – employer employee relationship present – hence not a supply – therefore NO GST leviable.
2. Transaction not covered under schedule III of CGST Act, – Contract employers not considered as employees – NO employer employee relationship present – hence supply – therefore GST is leviable.

GUJ/GAAR/R/2022/38 Dated: 10.08.2022

2. If the answer to Q.No.1 is affirmative, whether the exemption is available to the applicant in case of the services are provided on a sub-contract basis i.e., the applicant provides pre- and post-examination services to the main contractor who in turn provides the said services to the Educational Boards and Universities (including Open Universities)?

1. ITC on GST paid on the canteen facility is admissible to M/s Troikaa under Section l7(5)(b) of CGST Act on the food supplied to employees (excluding contractual employees) of the company subject to the condition that the burden of GST has not been passed on to the employees of the company.
2. ITC on GST paid on the canteen facility is not admissible to M/s Troikaa under Section l7(5)(b) of CGST Act on the food supplied to contractual worker supplied by labour contractor.

Explanation

1. ITC can be availed since the same has been provided as an obligation under the Factories Act. Section 17(5)(b) of the CGST act stipulates that the blocked inputs can be availed if the same have been provided as an obligation under any act for the time being in force.
2. ITC cannot be availed since the same has been provided to contract employees who cannot be regarded as employees under the Factories Act. Section 17(5)(b) of the CGST act stipulates that the blocked inputs can be availed if the same have been provided as an obligation under any act for the time being in force. Since there is no obligation – ITC cannot be availed.

GUJ/GAAR/R/2022/42 Dated: 28.09.2022

1. Whether the subsidized deduction made by the Applicant from the employees who are availing food in the factory/corporate office would be considered as a supply by the Applicant under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Gujarat Goods and Service Tax Act, 2017.
   In case answer to above is yes, whether GST is applicable on the amount deducted from the salaries of its employees?
2. In case answer to above is no; GST is applicable on which portion i.e. amount paid by the Applicant to the Canteen Service Provider or only on the amount recovered from the employees?

1. Subsidized deduction made by the Applicant from the employees who are availing food in the factory/corporate office would NOT be considered a supply under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Gujarat Goods and Service Tax Act. 2017.
2. The applicant is not liable to pay GST on the amount deducted/ recovered from the employees. Further the applicant is recipient of canteen service to facilitate the employees and Canteen Service Provider raised the Bill of canteen charges inclusive of GST as per the contract. The applicant collects/ recovers the partial amount from the employees and is required to pay the gross amount inclusive of GST to the canteen service by adding residual amount in the employees’ portion and is required to pay gross amount of Bill inclusive GST to the Canteen Service Provider.

Explanation

1. Transaction covered under schedule III of CGST Act, – employer employee relationship present – hence not a supply – therefore NO GST leviable
2. GST is not applicable on the amount deducted or collected from the employees as it is not a supply.
   The applicant is the recipient of canteen services – as a welfare measure for the employees – GST is applicable only on the invoice raised by supplier of canteen services to the recipient (i.e. applicant company)

KAR/ADRG/37/2019 Dated 16-09-2019

1. Whether accommodation service proposed to be rendered by the applicant to SEZ units is liable to CGST and SGST or IGST?
2. If the accommodation service to SEZ is covered under IGST Act, can these be treated as zero-rated supplies and the invoice be raised without charging Tax after executing LUT under section 16?

1. The accommodation service proposed to be rendered by the applicant to SEZ units are covered under the IGST as it is an inter-State supply as per section 7(5)(b) of the Integrated Goods and Services Act, 2017.
2. Since the accommodation service supplied to an SEZ are covered under IGST Act, the same can be treated as zero-rated supplies and the invoice can be raised without charging Tax after executing LUT under section 16.

Explanation

1. IGST is applicable since the same is a supply made to SEZ under section 7(5)(b) of the IGST Act.
2. The order is self-explanatory

KAR/ADRG/4/2021 dated 29-01-2021

1. Is the applicant eligible to be registered under GST Act?
2. Is there any tax liability on services rendered to the Hospitals/ Laboratories/ Biobanks registered in United States of America (USA) and other countries include export of Intellectuals like clinical data completions, analysis, clinical opinion advisory consultation through Phone calls, Video Conference, Mails and other electronic devices and the applicant is living in India and services rendered from the place of India?
3. Is there any tax liability on Health Care Services-Medical Services and Paramedical Services (Part-time practicing in Clinic) rendered in India to the recipient from India?

1. The applicant is liable for registration under the GST Act.
2. There is no liability of tax on diagnostic and treatment services rendered to the Hospitals/Laboratories/ Biobanks registered in United States of America and other countries. However, the business promotion services rendered, as per the contract submitted, are liable to tax under the GST Acts.
3. The diagnostic and treatment services are covered under Health Care Services and the medical services and part-time practising in Clinic are exempted from payment of GST

Explanation

1. Self-Explanatory
   1. Service – 1: Services of diagnosis and treatment of illness.
      The services provided by the applicant are covered under health care services which is exempted under GST (Section 11 of CGST Act, 2017) – even if provided to USA
   2. Service – 2: Business promotion services.
      The services provided by the applicant as an agent in the nature of business promotion and management are intermediary services. So the place of supply is the location of supplier i.e., India (Section 13(8) of IGST Act, 2017). Hence it is taxable (covered under SAC 9983).
2. The diagnostic and treatment services provided by the applicant from his clinical establishment to any person in India is exempt under section 11 of CGST Act, 2017.

KAR/ADRG/44/2020 Dated: 07-09-2020

1. Can the applicant avail GST Input on the equipments, furniture etc., which we are purchasing for the clinical establishment?
2. Can the applicant avail GST input on the reagents/consumables they would be purchasing for performing the tests as the reagents consumables are taxable and not the test.

1. The applicant can avail the GST input tax credit on the equipments. Furniture, etc. which he is purchasing for the project in question, subject to the restriction of the same in terms of Section 17(2) of the CGST Act 2017.
2. The applicant can avail GST input tax credit on the reagents/ consumables which are purchased for performing the test, subject to the restriction of the same in terms of Section 17(2) of the CGST Act 2017.

Explanation

As per section 17(2) of the CGST Act, where the goods or services or both are used for effecting taxable and exempt supplies, then the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies (including zero rated supplies).

03/WBAAR/2022-23 Dated: 30.06.2022

Explanation

The standard business practice of a car dealer is to purchase vehicles including one or more demo vehicles for test drive/marketing/promotion purposes. The demo vehicles are put up for sale after the demonstration/test drive period. The demo vehicles are purchased all along for further supply with the condition that they will be kept for a specific period of time. Since they are intended for further supply they do not fall under personal consumption and hence the same is not blocked under section 17(5).

TN/32/AAR/2022 Dated: 29.07.2022

1. Whether input tax credit can be claimed on the upfront lease premium paid?
2. If the answer is affirmative, in what manner the input tax credit can be availed?

1. The applicant is eligible to claim an Input Tax Credit on the upfront lease premium paid as per Sections 16 and 17 of the CGST /TNGST Act 2017.
2. The question on the manner in which ITC can be availed is procedural not admitted/ not answered.

Explanation

The applicant has paid upfront premium for long-term lease of a covered space, intended to be used by the applicant as an extended corporate office.

The upfront premium paid is only for the service of renting of immovable property for business purpose – hence, ITC can be claimed as it not related to construction of immovable property (ITC relating to construction of immovable property is only blocked as per 17(5) (d) of CGST Act).

TN/33/AAR/2022 Dated: 31.08.2022

Explanation

ITC on purchase of solar panel is not blocked as per Section 17(5).

• In the given case, the electricity generated by the solar panels is used for captive consumption of the tenants in the apartment complex.
• The excess electricity generated by the panels is fed to the power grid and the landlord is offered deduction in his electricity bill to the extent of the electricity supplied by him.
• However, the credits offered by the government is not passed on to the tenants.
• wherein, the landlord recovers the amount paid towards electricity through a separate invoice, for the gross energy units consumed by the tenants in the building at the rate charged by TNEB, which implies that the energy generated by Solar Power Plant are sold by the applicant to the tenants on their own account.
• Since supply of electricity is exempt under section 11. The inputs relating to such supply should not be availed or should be reversed as per section 17(2) of the CGST Act, 2017.
• This is why the applicant is not allowed to avail such credit on purchase and installation of solar panels.

GST-ARA-88/2019-20/B-30 Dated: 12/03/2020

Explanation

As per Section 17(5) (d), input tax credit shall not be available in respect of goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

TSAAR Order No. 22/2022 Dated: 08.04.2022

1. Whether the Applicant is required to obtain registration in the state in which goods are imported if the said goods are directly sold from the port of importation to the customers located across different states in India.
2. Whether the Applicant is entitled to avail Input Tax Credit of IGST paid on import of goods if the said goods are sold directly from the port of importation to the customers located across different states in India, without bringing such goods into Telangana?

1. The applicant is already having the registration in the State of Telangana which will cover all taxable transactions.
2. Yes. The Applicant is entitled to avail Input Tax Credit of IGST paid on import of goods if the said goods are sold directly from the port of importation to the customers located across different states in India, without bringing such goods into Telangana

Explanation

1. In the instant case, the applicant is clearing the goods for home consumption after payment of customs duty and IGST. He is subsequently selling the imported goods directly from the state of importation.
2. As per section 22 of the CGST Act, every supplier shall be liable to be registered in the State or Union territory, from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds twenty lakh rupees.
3. Section 22 does not require the applicant to register in all the states and since the applicant has already obtained a GST registration in the state of Telangana, it is sufficient to cover all the transactions or supplies made by the applicant, separate registration is not required.
4. Under Section 16 of the CGST Act, 2017 read with Section 20 of IGST Act, the IGST paid on imports is eligible to be availed as Input Tax Credit (ITC).

GUJ/GAAR/R/15/2021 Dated 27.01.2021

Explanation

1. As per Section 16(1) of the CGST Act, 2017, ITC can be availed only in respect of those inputs which are used or intended to be used in the course of furtherance of business.
2. The applicant was not able to prove that the gold bullions purchased had any direct nexus with the sale of castor oil seed. And hence the authority on absence of material proof concluded that the gold bullions are not used in the course of furtherance of business (sale of castor oil seeds). And hence the order.

KAR/AAR/62/2019-20 dated 20.09.2019

Further, in the case of inputs being goods, the applicant is only eligible to claim the input tax credit of the tax paid on such goods (inputs) lying in stock on the day previous to the effective date of registration, which is intended to be used in the course or furtherance of business, subject to other conditions and restrictions prescribed in the GST Act and in Rule 40 of the CGST Rules, in case the application for registration has been filed within thirty days from the date on which the applicant became liable for registration under the Act.

Explanation

The above order is self-explanatory