Indrajit Singh [2019] 106 taxmann.com 109 (AAR-WEST BENGAL)

 1. Query

Whether supply of providing conservancy/solid waste management service to Conservancy Department of the Howrah Municipal Corporation is exempted in terms of Sl. No. 3 or 3A of Notification No. 12/2017 – Central Tax (Rate) dated 28-6-2017, as amended from time to time, and if so, whether the notifications regarding TDS are applicable in this case?

2. Facts

Applicant is providing conservancy/solid waste management service to Conservancy Department of Howrah Municipal Corporation. Howrah Municipal Corporation is however deducting TDS while paying consideration for the above supply in terms of Notification No. 50/2018 – Central Tax dated 13-9-2018.

3. Contention by Appellant

The Applicant submits that the recipient, being a municipal corporation, is a local authority. He submits copies of the work orders issued, specification and terms and conditions of the work etc. to establish that he supplies pure service and, therefore, the exemption under Sl. No. 3 of the Exemption Notification applies to his supplies.

 4. Observation by AAR

 Scope of Entry No. 3 and 3A of Notification No. 12/2017 – Central Tax (Rate) dated 28-6-2017

Sl. No. 3 of the Exemption Notification exempts from payment of GST any “pure service” (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity 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. Sl. No. 3A of the Exemption Notification extends it to a “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.

These functions are in the nature of public welfare service that the governments on their own, and sometimes through governmental authorities/entities, do provide to the citizens. When the activity is in relation to any such function, the supply to the governments or governmental authorities/entities or local authorities is exempt from paying GST under Sl. No. 3 or 3A of the Exemption Notification, provided it is either a pure service or a composite supply, where supply of goods does not constitute more than 25% of the value.

Applicant’s service to HMC, therefore, is exempt under Sl. No. 3 of the Exemption Notification.

Condition 1:-Recipient is Local Authority: The recipient is a municipal corporation, which is a local authority as defined under section 2(69) of the GST Act.

Condition 2:- Nature of Work is pure Service-In Work Orders issued to Applicant, recipient describes nature of work as lifting and removing of daily garbage etc. accumulated from the vats, dumping yards, containers and other places on the roads, lanes and bye-lanes of HMC area. In the Specification and Terms and Conditions of Work it is further specified that the Applicant must provide vehicles suitable for removal of garbage including payloaders with drivers, labours, unloading equipment, machinery, fuel/lubricants etc. and shall be responsible for repair and maintenance of the vehicles. There is, however, no reference to any supply of goods in the course of executing the work. The vehicles used and the fuel consumed and the machinery used do not result in any transfer of property in goods to HMC. The consideration to be paid measures the work only in terms of the quantity of the garbage lifted and removed. Based on the above documents, it may, therefore, be concluded that the Applicant’s supply to HMC is a pure service.

Condition 3:- Activity Falls under the Scope of Article 243W of Constitution- Article 243W of the Constitution that discusses the powers, authority and responsibilities of a Municipality, refers to the functions listed under the Twelfth Schedule as may be entrusted to the above authority. Sl. No. 6 of the Twelfth Schedule refers to public health, sanitation, conservancy and solid waste management. The Applicant’s supply to HMC is a function mentioned under Sl. No. 6 of the Twelfth Schedule.

Since Applicant Service is Exempt from GST, therefore no TDS is liable to be deducted under Section 51 of CGST Act, 2017

Section 51(1) of the Act provides that the Government may mandate inter alia a local authority to deduct TDS while making payment to a supplier of taxable goods or services or both. As the Applicant is making an exempt supply to HMC the provisions of section 51 and, for that matter, the TDS Notifications do not apply to his supply.

5. Held

Applicant’s supply to Howrah Municipal Corporation, is exempt from the payment of GST under Sl. No. 3 of Notification No. 12/2017 – Central Tax (Rate) dated 28-6-2017 as amended from time to time.

As Applicant is making an exempt supply, the provisions of section 51 and, for that matter, Notification No. 50/2018 – Central Tax dated 13-9-2018, to the extent they mandate and deal with the mechanism of TDS, do not apply to his supply.

 6. Comment

The Judgement lays down the fact clearly that no TDS is liable to be deducted on exempt supply. TDS is required to be deducted only on supply of taxable goods or services or both.

Mohana Ghosh [2019] 106 taxmann.com 108 (AAR-WEST BENGAL)

1. Query

Whether credit is admissible of the input tax paid on the purchase of motor vehicles for the supply of cabs on rental basis.

 2. Facts

Applicant supplies rent-a-cab service. Applicant submits that people take the car on rent for the transportation of passengers.

3. Contention of the Appellant

Applicant refers to section 17(5)(a)(B) of the GST Act that allows credit of input tax paid on the purchase of motor vehicles when used for supplying passenger transportation service. Rent-a-Cab is, therefore, essentially associated with the transportation of passengers. GST paid on the purchase of motor vehicles for supplying rent-a-cab service should, therefore, be admissible in terms of section 17(5)(a)(B) of the GST Act.

Invoices have been raised for duration of renting, which is a fixed number of hours in a calendar month. If cab is requisitioned on holidays or for extra hours on a working day, an additional amount is charged irrespective of the distance traveled. Recipient has to pay a fixed amount whether or not the cab is moved. If, however, the cab travels beyond a threshold, the rent is calculated as a cost-plus, taking the distance traveled into account.

4. Observation by AAR

Applicable Provisions of CGST Act, 2017 as amended vide CGST Amendment Act, 2018 is Section 17(5)(a)(B) and Section 17(5)(b)(i). AAR distinguished between Passenger Transportation Service and Renting of Vehicle as follows:

• Passenger Transportation Service: Passenger transportation service is classified under SAC 9964. The recipient of the service is a passenger travelling from one place to another. He may have varying degrees of control over the carriage, providing him with a certain measure of independence in choosing the destination and travel time, depending upon the nature of the contract, explicit or implied. But the supply remains that of transportation of the recipient as a passenger, and the consideration is paid for the distance traveled.

• Renting of Motor Vehicle: Renting of any motor vehicle is classified under SAC 9966. The recipient of this service is not a passenger. He is enjoying the service of having provided a motor vehicle, with or without a driver, for use in whatever way he likes for the duration of the renting period. It may remain parked for the entire duration of renting without actual transportation of any person. Even when any person – the recipient of the service or someone of his choice – is being actually transported, the consideration is paid not for the distance traveled, but for renting the cab.

Thus, in passenger transportation service (SAC 9964) recipient of service is a passenger and he pays consideration for distance traveled, whatever be the degree of control he enjoys over the vehicle. In renting or hiring of a motor vehicle (SAC 9966) the recipient is provided the right to use the vehicle over a specified duration, whether he is a passenger or not. Distance traveled is taken into consideration to recover the cost of fuel. But travelling a certain distance is not the essence of the service.

Rent-a-cab is not defined in the GST Act. The Applicant provides cab rental service inter alia to institutions like West Bengal Postal Service. The recipient has to pay the Applicant a certain amount per month as consideration irrespective of what distance the cab travels in a particular month. Additional amount has to be paid if the cab is retained for extra hours or requisitioned on holidays. For the purpose of covering the cost of fuel, the distance traveled needs to be brought into play, but only if it crosses a certain threshold.

It is, therefore, clear from the above discussion that the nature of the service the Applicant provides is classifiable under SAC 9966 as renting of a motor vehicle. Credit of GST paid on purchase of motor vehicles or other inputs for the supply of the Applicant’s service is not, therefore, admissible in terms of section 17(5)(b)(i) of the GST Act.

5. Held

GST paid on the purchase of motor vehicles for supplying rent-a-cab service is not admissible for credit in terms of section 17(5)(b)(i) of the GST Act.

6. Comment

AAR has distinguished between Passenger Transportation Service and Renting of Vehicle. On that basis AAR has held that Provisions of Section 17(5)(a)(B) are not applicable on the applicant since the activity of the applicant is Renting of Motor Vehicle and said section allows Input Tax Credit on Passenger Transportation Service. Further they have held that Section 17(5)(b)(i) restrict the credit in case of renting of motor vehicle except when used for the purposes specified in clause 17(5)(a) and (aa).

Section 17(5)(a)(A) allows Input Tax Credit when vehicles are used for further supply of such motor vehicle. Neither the question was raised by the applicant and nor was considered by AAR that why renting of vehicle would not fall into further supply of such motor vehicle. Motor Vehicles or conveyance used for making taxable supply i.e. further supply of such vehicle or conveyance would not only include circumstances wherein they are being sold to other person but would also include motor vehicles or conveyance which are being supplied on rent. The words used are supplied, whether motor vehicle is supplied as a sale or on rent is immaterial. Provision of section has not linked the supply with transfer of ownership. Providing motor vehicle on rent has been also been classified as supply under the law. Therefore, Input Tax Credit in respect of supplying motor vehicles on rent would also be covered under this provision along with the person selling the motor vehicles.

Introduction to Section 143 of CGST Act and the option to send the goods without payment of tax to the Job Worker

It would be apt to quote provisions of Section 143 before moving ahead in this brief write up-

A registered person (hereafter in this section referred to as the “principal”) may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise..

Provisions of Section 143 of CGST Act allows principal to send the goods to the Job Worker without payment of tax under intimation and subject to such conditions as may be prescribed and further goods have to be returned back from the job worker to the principal within the time specified under Section 143.

Option to send the goods without payment of tax is not mandatory for the principal and he may send the goods against payment of tax to the job worker

The facility to send the goods without payment of tax is optional upon the principal and not mandatory. Therefore, if deemed fit, principal can send the goods against payment of tax. Further, sending of goods to the job worker without payment of tax would be against intimation and subject to such conditions as may be prescribed. The intimation in this case would be ITC-04 and the have been provided in Section 143 read with Section 19 of CGST Act, 2017 and Rule 55 of the CGST Rules, 2017.

Circular No. 38/12/2018 Dated 26^th March 2018 also clarified that registered person (principal) is not obligated to follow the said provisions. It is his choice whether or not to avail or not to avail of the benefit of these special provisions. Therefore, it is at the option of the registered person that whether he wants to opt for sending the goods to the Job worker with payment of taxes or without payment of taxes.

Consequences of the goods not being returned with the specified time limit

Section 143 of the CGST Act, 2017 provides that if the time frame specified therein for bringing back or further supplying the inputs / capital goods is not adhered to, the activity of sending the goods for job work shall be deemed to be a supply by the principal on the day when the said inputs/capital goods were sent out by him. Thus, the statute has by virtue of a deeming provision treated the non-receipt of goods within the specified time limit as if the goods have been supplied on the day when they were sent out by the principal to the job worker for job work.

If the principal does not opt for sending goods without payment of tax then he would have to send the goods against payment of tax

If the principal does not opt for sending goods without payment of tax then goods would be sent against payment of tax and job worker would be able to take Input Tax Credit of the tax charged thereon and also principal would also be allowed to take credit of the inputs against the said liability.

Impact of Section 143 of CGST Act, 2017

As can be envisaged from the discussion above that Section 143 allows the principal to send the goods to the job worker without payment of tax and if the principal does not opt for the same, then he can only send the goods against payment of tax. Thus, as a corollary, it can be said that had section 143 would not have been there, then sending of goods to job worker would have only be possible against payment of tax. But how good that corollary is would be required to be tested on the legal aspect and this article tries to analyse it.

Section 143 of CGST Act, 2017 vis-a-vis Rule 4(5)(a) of Cenvat Credit Rules, 2004

• Bare provision of Section 143 of CGST ACT, 2017

a) Option for sending the Goods

A registered person (hereafter in this section referred to as the “principal”) may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise..

b) What happens if goods are not received within the specified time limit

(3) Where the inputs sent for job work are not received back by the principal….within a period of one year of their being sent out, it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out.

• Bare provision of Rule 4(5) of Cenvat Credit Rules 2004

a) Procedure for sending the Goods

The CENVAT credit on inputs shall be allowed even if any inputs as such or after being partially processed are sent to a job worker and from there subsequently sent to another job worker and likewise, for further processing, testing, repairing, re-conditioning or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or the provider of output service taking the CENVAT credit that the inputs or the products produced therefrom are received back by the manufacturer or the provider of output service, as the case may be, within one hundred and eighty days of their being sent from the factory or premises of the provider of output service, as the case may be:

b) What happens if goods were not received within the specified time limit

If the inputs or capital goods, as the case may be, are not received back within the time specified under sub-clause (i) or (ii), as the case may be, by the manufacturer or the provider of output service, the manufacturer or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods, as the case may be, by debiting the CENVAT credit or otherwise…

Understanding-On a comparison of the above provisions of pre and post GST Regime, it can be observed that under Central Excise Regime, a person sent the goods to job worker without payment of tax and if the same were not received within the specified time limit, then ITC attributable to inputs or capital goods would have to be reversed. However, in GST Regime option has been provided to the tax payer either to remove the against payment of tax or without payment of tax and if the goods are not received within the specified time limit then it is deemed as if the goods have been supplied on the date on which the goods were sent out. Thus, on one hand pre-GST Regime provided for reversal of ITC in case of receipt of goods beyond the prescribed time limit but on the other hand, in post-GST Regime, non-receipt of goods has been treated as deemed supply.

Therefore, departure has been made from the previous regime in as much as with goods being sent out against payment of tax and non-receipt of goods within the specified time limit would be treated as deemed supply from the date when the goods were sent out for job work against reversal of Input Tax Credit in the previous regime.

Whether sending goods against payment of tax is possible without the activity of sending goods by principal to job worker being classified as supply under section 7 of CGST Act, 2017

Section 143 is not the charging section which can provide for levy of tax without the same being covered within the scope of supply by virtue of Section 7. It is further emphasised that any transaction can be held to leviable to tax without falling within the scope of supply only by virtue of a deeming provision as has been provided in section 35(6). However, Section 143 does not provide that if the principal does not opt for the option provided under this section then he would have to send the goods against payment of tax by deeming as if the goods have been supplied to the job worker. If such deeming fiction is not provided for in the section for the principal not opting for sending goods without payment of tax, then sending the goods against payment of tax is only possible provided the said transaction falls within the scope of supply under section 7 on its own. The deeming fiction is only applicable when the goods are not received within the prescribed time limit.

Thus, Section 143 unless by way of deeming provision which it does not contain, by itself cannot provide that if procedure provided under the section is not opted for then the goods can only be sent against payment of tax if the transaction by itself does not fall within the scope of supply as provided under section 7.

Circular No. 38/12/2018 dated 26^th March 2018 also provides the same that essentially, sending goods for job work is not a supply as such, but it acquires the character of supply only when the inputs/capital goods sent for job work are neither received back by the principal nor supplied further by the principal from the place of business / premises of the job worker within the specified time period (under section 143) of being sent out. However, at another place it provides that it is at the option of the registered person that whether he wants to opt for sending the goods to the Job worker with payment of taxes or without payment of taxes.

Therefore, the circular contradicts itself wherein it is clarifying that sending the goods by principal to job worker is not “essentially” a supply but acquires character of supply if the goods are not received within the specified time limit but at the same time it also provides that sending the goods by following the procedure laid down in Section 143 is optional for the principal. He may send the goods against payment of tax if he deems it fit. Thus, the circular only provides that the activity acquires the nature of supply when the goods are not received back within the specified time limit but does not provide that how it acquires the nature of supply if the procedure laid down in section 143 is not opted to be followed.

The question is that if an activity of sending of goods by principal to job worker does not fall within the scope of supply essentially at the time of sending of the goods then whether tax can be demanded if it is opted that procedure laid down in the section is not to be followed. It would be apt to highlight that Section 143 is somewhat similar to conditional exemption under Section 11 wherein it allows an activity to carried out without levy of tax but the question is if an activity is not at all falling within the scope of supply then what’s the purpose of allowing it to be carried out against payment of tax.

Deeming provision in Section 143 is only applicable in case goods are not received back within the specified time limit and no such deeming provision is provided for cases wherein the option is not opted for

3) Where the inputs sent for job work are not received back by the principal….within a period of one year of their being sent out, it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out.

Circular No. 38/12/2018 dated 26^th March 2018 clarifies that deeming provision is not only deeming the activity of sending of goods to job worker as supply but also deeming that it would be treated as supply from the date when the goods were sent out.

The term “supply” has not been defined but only scope has been given and that too an inclusive one. Whether in such scenario can movement of goods from principal to job worker and vice versa could be held to be covered within the scope of supply

The next question which arises is whether movement of goods from principal to job worker and vice versa could be held to be supply. This is so because had section 143 not been in place or if a person does not opt for sending goods without payment of tax, then tax could have been levied only if sending of such goods to job worker and receipt thereof would have been supply. 

Apparently, there is no consideration when the goods are moved from principal to the job worker and vice versa. The only mode of consideration which can be sought is when the goods are sent to job worker, such movement is a supply and when the goods are received back from the job worker, such movement from job worker to principal is also a supply. Therefore, such transaction for GST would be more in the nature of exchange or barter of raw material and finished goods. But, then schedule II Para 3 provides that any treatment or process on goods belonging to others is a service. So, again how can activity of merely sending the goods without opting for provision under section 143 can be held as leviable to tax.

Further whether Para 1 Schedule I regarding permanent disposal or transfer of business asset for which ITC has been claimed, can be made applicable for treating the activity of sending goods as “Supply”. But then sending goods to job worker is not permanent disposal or transfer of business asset as the same would be brought back or supplied from the premises of job worker by principal.

The matter is far from clear although the legislative intent seems to treat the same as Supply of goods if the option provided under section 143 is not opted for.

Movement of goods for Job Work has been treated differently from the movement otherwise than for supply

The legislative intent of treating the movement from principal to job worker different from the movement otherwise than for supply is clear from Rule 55 as well which is reproduced as follows:

For the purposes of-

(a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,

(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply, or

(d) such other supplies as may be notified by the Board,

the consigner may issue a delivery challan, serially numbered not exceeding sixteen characters, in one or multiple series, in lieu of invoice at the time of removal of goods for transportation, containing the following details

Thus, transportation of goods for job work has been categorised differently from the transportation of goods for reasons other than by way of supply. This might also be on account of specific provision of Section 143 and job work being treated differently from other movement of goods which have not been treated as supply.

So, what if someone does not opt for the procedure laid down in Section 143. Can he challenge that sending goods for job work by principal to job worker is not essentially a supply and therefore no tax can be demanded on not opting for procedure laid down in Section 143. The section itself does not provide that activity of sending the goods without following the procedure would be deemed as a supply but only provides for deeming provision if the goods are not received back within the specified time period and that too if the procedure is opted for

Lets try to conclude the discussion –

Supposedly, Principal has sent the goods for job work and has not opted for procedure under section 143. The question is if a person has not opted for the procedure in section 143 can he be asked to pay tax on sending the goods to job worker.

Thus, in the backdrop of the above examples, now we come to the last but the main question that whether if a person does not opt for procedure laid down under Section 143, can the legislature demand tax from the principal even if sending of the goods is not a supply under section 7 and section 143 does not contain a provision for treating the activity of sending goods by principal without opting for procedure laid down under the section as a deemed supply. It only contains a deeming provision for goods not received back within the specified time limit and that too for the person who has opted for the procedure.

The summary is that if the activity of sending goods to job worker essentially is not a supply then merely because section 143 prescribes optional procedure for sending the goods without payment tax and if such optional procedure has not been followed, it cannot be the sole criterion for holding the principal liable to payment of tax for an activity which in itself does not fall within the purview of supply (and something which has been provided in Circular No. 38/12/2018 Dated 26^th March 2018).

Can a section prescribing procedure overrule the scope of section 7 because asking a person to reverse the Input Tax Credit is one thing (as in the case of pre-GST Regime) but to hold an activity to be against payment of tax would be a completely different scenario and for that a specific provision should be there for providing levy of tax either deeming or otherwise (Just like in the case of non-receipt of goods within the specified time limit). The payment of tax on activity is only possible in the statute once it is falling within the scope of supply or there is a deeming provision for such activity to be falling within the scope of supply.

Concluding the above write-up it seems that there are some missing links in the jig saw puzzle as in the case of issuance of vouchers in GST Regime and one which would be taking its own course in the future. The above write up is a food for thought for the readers and although conclusion should be inevitable for each write up but for this one it’s better to conclude without conclusion but keeping it open ended.

Question-Mr. A is registered person in GST. He is having a manufacturing enterprise. Along with the manufacturing enterprise, he is also having an agriculture land on which he is growing agriculture produce. The goods are taxable in GST by virtue of notification No. 1/2017-Central Tax (Rate) Dated 28^th June 2017 (as amended from time to time).

The moot question is whether such person is required to charge tax on such sale of agriculture produce or whether he enjoys exemption on sale of such agriculture produce since he is an agriculturist.

Answer-Let’s try to analyse the above scenario firstly by virtue of Section 23 and then by virtue of Section 9 and Section 11 of CGST Act, 2017-

Section 23(1)(b) of CGST Act, 2017-Exemption from Registration to an Agriculturist-

At the outset, lets first refer to Section 23(1)(b) of CGST Act, which is being reproduced herewith-

Persons not liable for registration. — (1) The following persons shall not be liable to registration, namely: ––

(b) an agriculturist, to the extent of supply of produce out of cultivation of land.

The above provision provides that an agriculturist would not be liable for registration to the extent of supply of produce out of cultivation of land. However, if agriculturist is already a registered person on account of making other taxable supplies, then in such case applicability of section 23 cease to have effect and he becomes a registered person under GST and all provisions of GST Act are applicable upon him as they are applicable on any other person.

Taxability of Supply of Agriculture produce sold by Mr. A

Now in the above situation, Mr. A is already registered in GST and is making supply of agriculture produce which is taxable as per Notification No. 1/2017-Central Tax (Rate) Dated 28^th June 2017 (as amended from time to time).

The question is now once Mr. A is already registered in GST and Section 23(1)(b) ceases to have any applicability on the given scenario, whether Mr. A would be required to levy tax on the supply of agriculture produce. The answer lies in the fact that once a person is registered in GST, then exemption from levy of tax can only be given under Section 11 of CGST Act, 2017 and there is no such exemption given in Section 11 of CGST Act, 2017 to a registered person supplying agriculture produce which is taxable in GST, even though he might be an agriculturist.

Conclusion-Therefore, since Mr. A is registered in GST, thus even though he might be an agriculturist but still he would be liable to charge tax on supply of taxable agriculture produce. He cannot claim exemption from levy of tax by virtue of provisions of Section 23(1)(b) of CGST Act, 2017 since the same are registration provisions and they ceases to have applicability once a person is registered in GST and further there is no exemption notification issued in Section 11 of CGST Act from levy of tax for an agriculturist who is a registered person in GST.

Case 1: Springfields (India) Distilleries (AAR GOA)

Query: Hand Sanitizer is covered under following HSN Code & rate 30049087 – Antihypertensive drugs : Antibacterial formulations not elsewhere specified or included HS Code and Indian Harmonized System Code. Rate of GST is 12%.

The Minstry of Consumer Affairs, Food and Public Dirtribution, in a notification CG-DL-E13032020-218645 has classified Hand Sanitizers under the Essential Commodities Act, 1955 as an essential commodity and thus exempt from GST.

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Case 2: High Tech Refrigeration & Air Conditioning Industries (AAR GOA)

Query

a) Fixing of Air conditioner & VRV system in Goa for a client (Recipient) registered outside Goa but not registered in Goa. Whether IGST or (SGST & CGST) rate applicable & whether billing B to C OR B To B

b) Suppling of Air conditioner to client (Recipient) registered outside Goa but not registered in Goa consisting of Air conditioner (28%) Copper pipe, Drain pipe, Electric cable etc (18%) and fixing rate (18%). These items can be supplied/Billed them separately under GST

c) Supplying of Air conditioner (28%) for residential house in Goa consisting of in case require additional item Copper pipe, Drain pipe, Electric cable etc (18%) and fixing rate (18%). Billing them separately is allowed/ok.

d) Can installation of Air conditioner (28%) can be done by sister concern or Third party to client based in Goa or Outside Goa @ (18%) GST for fixing.

e) Can composite Dealer raise Service Bill for Fixing of Air Conditioner & also what GST Rate applicable.

f) Whether stabilizer may or may not be sold with Air conditioner what is the Rate of GST Applicable on Stabilizer (18%) when it is Attached / Supplied with Air conditioner (28%)

g) Rate of GST on Centralized Air Conditioning Systems. For (works contract) Rate of GST on Split Air Conditioning System fixed in room. And Rate of GST on movable Air conditioning System. Client Registered in Goa or Client registered outside Goa.

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Case 3: Uttar Bihar Gramin Bank (AAR Bihar)

Query: Applicant is engaged in the business of banking as a regional Rural Bank. It accepts deposit from its customers. It is statutorily require to pay premium to Deposit Insurance and Credit Guarantee Corporation (In short “DICGC) on these deposits, on which GST is collected by the DICGC. Now the bank is availing and intends continue to avail credit of GST paid, as prescribed under respective GST Acts, as it is an inward supply for the purpose of its banking business. To avoid any future litigation, bank now seeks advance ruling, whether input credit of GST on this inward supply is just and proper under the GST law?

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Case 4: lZ-Kartex named after P G Korobkov Ltd (AAR West Bengal)

Query: A foreign company has contracted for a long term repair and maintenance contrct for the equipment it supplied to Bharat Coking Coal Ltd. Whether it amounts to import of service is the question to be answered.

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Case 5: Swayam (AAR West Bengal)

Query: The applicant is a charitable trust engaged in extending legal, medical, psychological and financial support to the women surviving violence and sexual abuse. It often pays for the legal and medical expenses of these women. It wants to know whether it is liable to pay tax on reverse charge on such payments.

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Case 6: Mansi Oils and Grains Pvt Ltd (AAR West Bengal)

Query : The applicant is a corporate debtor in terms of the Insolvency and Bankruptcy Code, 2016 and now under liquidation. The applicant wants to know whether sale of assets by the liquidator is ‘supply’ and, if so, whether and how the liquidator should get herself registered.

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Case 7: The Leprosy Mission Trust lndia (AAR West Bengal)

Query: Whether the service of providing vocational training courses at its Vocational Training Centre, Bankura is exempt under Entry 66 of Notification No. 12/12017 – Central Tax (Rate) dated 28/06/2017

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Case 8: Hazari Bagh Builders Pvt. Ltd. (AAR Rajasthan)

Query: The Applicant Company is registered in the State of Rajasthan and having GSTIN in State of Rajasthan. The Applicant company has entered into a long term Lease Agreement of 99 years with RLDA for undertaking residential & commercial development along with development of financial infrastructure as on 08.11.2019. The Applicant Company paid a sum of Rs. 158657105.00 in parts by way of RTGS on separate days in the month of February, 2019 as Security deposit which, in case of breach is refundable after forfeiting the bid security deposited separately for both the Plots as per the terms of the lease agreement which is Rs. 3300000.00 for Plot A and of Rs. 5200000.00 for Plot B. The issue to be examined in the present case is whether the amount paid prior to 29.03.2019 in pursuance to the lease agreement of 99 years executed on 08.11.2019 are exempt from levy of GST or not.

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Case 9: INVENTAA LED Lights Private Limited (AAR Tamil Nadu)

Query:

1. What is the applicable GST Tariff code and GST rate for the supply of patent-applied LED stem (long bulb) with fittings when both are manufactured in the applicant’s factory and supplied as a single unit?

2.Is it a composite supply or a mixed supply?

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Case 10: Rajesh Rama Varma (AAR Tamil Nadu)

Query:

a) Type of Service (Export or domestic)

b) Tax Liability Determination.

c) Admissibility of refund on taxes paid

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Case 11: A.M. Abdul Rahman Rowther & Co (Nizam Tobacco Factory)(AAR Tamil Nadu)

Query: .

1. Classification of Goods

2. Applicability of Notification 01/2017 Comp.Cess(Rate)

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Case 12: Johnsons Lift Private Limited (AAR Tamil Nadu)

Query: Whether Sl.No. 3(v)(b) of Notfn. 11/2017-CT (Rate) is available when such building consists of more than one residential unit and falls under the definition of “residential complex”when (a).such building consist of more than one residential unit

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Case 13: Global Textile Alliance India Pvt Ltd (AAR Tamil Nadu)

Query: What is the correct classification and rate of GST applicable on supply of the following Goods:

Knitted Fabrics; Woven Fabrics; Woven Fabric bonded with Non Oven Fabric; Covers for pillow, latex block, mattresses; Foot Runner; Pillow Sheet; Chenille Yarn; Poly Propylene Extrusion Yarn; Poly Propylene Texturized Yarn; Polyester Texturized Yarn.

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Case 14: Kavi Cut Tobacco(ARUMUGAM)(AAR Tamil Nadu)

Query:

1.Classification of Goods

2. Applicability of Notification 01/2017 Comp.Cess(Rate)

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Case 15: Heavy Vehicles Factory (AAR Tamil Nadu)

Query: .

1. Whether Tank and all Tank parts supplied by the applicant is considered under HSN code “8710000-Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles”?

2. Whether parts manufactured specifically by applicant for TANK shall be considered under 87100000?

3. Whether parts and accessories supplied by their vendor specifically manufactured for tank parts and the same is not supplied to any other company will come under the HSN 87100000?

4. Whether tank parts of the following shall be considered under 87100000 or not:-

O Ring, U Drill, Accumulator Assembly, Adaptor Assembly, Angle piece, Armature Assembly, Armour Steel Plate, Assembly Fixture, Assembly Bracket, Axial Bearing, Axle, Ball Bearing, Band Assembly, Base Assembly, Battery, Bearing Bush, Bellows, Bevel Gear, Booster Assembly, Boss Assembly, Bracket Assembly, Bush, bushing, Casing Assembly, Clamp Assembly, Clip Assembly, Collar Assembly, Connector Assembly, Cover Plate, Diode, Dowel Pin, Electrical Wire used in Tank, End Mill, Fanuc Fuse, Fixture for Assembly, Flange, Gasket Assembly, Gasket Rubber, All type of Gauge, Gear Box, Gusset Plate, Hinge Assembly, Hose Assembly, All type of Hydraulic items used in tank, Insert carbide, Jig Drill, Knob Assembly, Latch Assembly, Leather washer, Lock Assembly, Mandrel Assembly, Milling Fixture, Needle Bearing, Nozzle Assembly, Oil Seal, Panel Assembly, Pipe Assembly, Planet Pinion, Plate Assembly, Plug Gauge, Retainer Steel, Rib Assembly, Shaft Assembly, Shim, Sleeve Assembly, Spacer, Spindle Steel, All types of spring, Stiffener, Stop Steel, Stopper Steel, Strap Assembly, Strip Assembly, Sub-Assemblies, Support Assembly, Thyristor, Torsion Bar, Tube Assembly, Turret, Twist Drill, Valve Assembly, Washer( Rubber made or Steel made), Wedge, Worm Wheel, Worm Gear, Worm Shaft, Yoke Assembly.

5. If the vendor is supplying parts under an HSN code other than 87100000, is it necessary that it has to be supplied under the same HSN code on what the vendor is charging?

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Case 16: Tamil Nadu Generation and Distribution Corporation Limited(AAR Tamil Nadu)

Query:

1.GST applicability on the transactions between TANGEDCO Ltd. & TANTRANSCO Ltd

2.Applicability of GST on Deposit Contribution Works

3.Whether TANGEDCO ltd can be considered a “Government Entity”

4.Applicability of GST on Transmission Charges for Natural Gas.

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Case 17: Consulting Engineers Group Limited (AAR Andhra Pradesh)

Query: Whether the ‘Project Management Consultancy’ services provided to Andhra Pradesh Panchayat Raj Engineering Department for Andhra Pradesh Rural Road Project (APRRP) for Road Construction can be termed as ‘Pure Services’ as referred in Sl. No. 3 – (Chapter 99) of Table mentioned in Notification No. 12/2017 – Central Tax (Rate) Dated 28/06/2017 and accordingly eligible for exemption from Central Goods and Service Tax and Sl. No. 3 – (Chapter 99) of Table mentioned in G.O.Ms.No.588 –(Andhra Pradesh) State Tax (Rate) Dated 12/12/2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.

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Case 18: Halliburton Offshore Services Inc. (LIH)(AAR Andhra Pradesh)

Query:

1.Whether reimbursement received towards LIH equipment can be considered as a supply as per Section 7 of the CGST Act, 2017 and hence, liable to GST?

2.If reimbursement received towards LIH equipment can be considered as supply and liable to GST, what would be the classification and the rate of GST applicable on such supply? Whether the same would be treated as “agreeing to tolerate an act” as per clause 5(e) of Schedule II of the CGST Act, 2017 and subject to GST at the rate of 18% or the same would be treated as a composite supply of works contract service (as a part of main service under the Contract)and thus, GST can be charged at the rate of 12% equivalent to the GST rate applicable for supply of composite works contract services?

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Case 19: Halliburton Offshore Services Inc.(Oil India)(AAR Andhra Pradesh)

Query:

1.Whether the supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis by the Applicant under the Contract qualify as composite supply.

2.If answer to Para (a) is yes, then whether the supplies made under the Contract merits classification under Entry 9986 (ii) – Service of exploration, mining or drilling of petroleum crude or natural gas or both and subject to GST at the rate of 12%/18% as the case may be.

3.If the answer to Para (a) is no, then whether such supply of mud chemicals and additives on consumption basis at OIL India’s location in India provided under the Contract qualify for concessional GST rate of 5% against an Essentiality Certificate (‘EC’) under Notification No. 50/2017-Customs dated 30 June 2017.

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Case 20: Leprosy Mission Trust India(AAR Andhra Pradesh)

Query:

Whether services provided under vocational training courses recognised by National Council for Vocational Training (NCVT) is exempted either under Entry No.64 of exemptions list of Goods and Services Tax Act, 2017 or under Educational Institution defined under Notification 12/Central Tax (Rate)?

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Case 21: Ushabala Chits Private Limited (AAR Andhra Pradesh)

Query:

1.Whether the interest/penalty collected for delay in payment of monthly subscription by the members forms a supply under GST?

2.If the said interest/penalty is a supply, what is the classification and rate of duty applicable on the said supply?

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Case 22: Lakshmi Tulasi Quality Fuels (AAR Andhra Pradesh)

Query: The applicant seeks advance ruling on whether she is eligible for the exemption from payment of GST on the monthly rentals received by her on lease of her residential building at Telangana to D-Twelve Spaces Private Limited, as per Sl.No.13 of the Notification No.9/2017 Dt:28-6-2017.

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Case 23: Pulluri Mining & Logistics Private Limited (AAR Andhra Pradesh)

Query:The applicant seeks advance ruling on Whether the HSD Oil issued free of cost by the service recipient to the applicant would form part of value of supply of service by the applicant as per Section 15 of the CGST Act, 2017? And more particularly under sub-section (2) (b) of Section 15 of the CGST Act”.

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Case 24: Zigma Global Environ Solutions Private Limited(AAR Andhra Pradesh)

Query:

1.Classification of the services provided by the Applicant.

2.Whether services provided by the Applicant are exempted under Sl.No.3 of Notification 12/2017 dated 28.07.2017 as amended?

3.Whether the service recipient i.e., M/s. Tirupati Smart City Corporation is a “Governmental Authority” as per the definition of Notification No:12/2017 Central Tax (Rate) dt:28.06.2017.

4.Whether the Governmental Authority is liable to deduct TDS as per the provisions of section for the services rendered as state in the Application?

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Case 25: Andhra Pradesh State Road Transport Corporation (AAR Andhra Pradesh)

Query:

1.Whether the services of APSRTC giving Non Air Conditioned Buses on contract for the occasions of marriages, functions etc, for transportation of employees and students of other organizations/Department, for different purposes like, transportation of passengers to Sabarimala, transporting of public to the places where meetings conducted by political parties and to the places like Polavaram project, are covered under contract carriage as specified vide Serial No 15 of notification 12/2017;

2.Whether the APSRTC, being a public sector undertaking, whose books of accounts are subjected to CAG of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force, is it required to file reconciliation statement in FORM-GSTR-9C as per proviso to Section 35(5) of the GST Act,2017.

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Case 26: Master Minds (AAR Andhra Pradesh)

Query:

1.Whether the services of ‘supply of service of education’ as per the curriculum prescribed by the statutory authorities/ government to the students of the applicant for obtaining qualifications/ certificates of CA-Foundation, CA-Inter, CA-Final, CMA (ICWA)-Foundation, CMA-Inter, CMA-Final and Intermediate duly recognized by the respective statutory authorities/ government are exempted under Notification No.12/2017-CT (Rate) dt.28.06.2017 (entry no.66(a)), as amended?

2.Whether the charges collected for providing accommodation to the students undergoing the above courses are exempted from GST as provided under Notification No.12/2017-CT (Rate) dt.28.06.2017 (entry no.14), as amended read with Circular No.32/06/2018-GST dt.12.2.2018since the amount charged from the students by the hostel run by the applicant is less than Rs.1000/- per day?

3.Whether the charges collected by the applicant for catering service by supplying food to the students undergoing the above courses are exempted from GST as provided under Notification No.12/2017-CT (Rate) dt.28.06.2017 (entry no.66(a)), as amended?

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Case 27: Halliburton Offshore Services Inc. (Drill Bits)(AAR Andhra Pradesh)

Query:

1.Whether the import of drill bits for supply to ONGC at its location in India on consumption basis involves two supplies namely, –    Import into India of drill bits; and –           Indigenous movement from the port of import to ONGC’s location.

2.If two supplies are involved in the abovementioned transaction then whether two Essentiality Certificates (‘EC’) are required to be issued i.e. –         one for import of drill bits into India under serial no. 404 of Notification No. 50/2017-Customs, dated 30 June 2017; and –                another for indigenous movement under Notification No. 3/2017-Central Tax (Rate), dated 28 June 2017 respectively.

3.If answer to (a) above is no then whether the supply of drill bits to ONGC in India will be covered by serial no. 404 of Notification No. 50/2017-Customs dated 30 June 2017 (i.e. under single EC) and no two separate ECs are required.

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Case 28: Ocean Sparkle Limited (AAR Andhra Pradesh)

Query: This application for Advance Ruling is being filed Seeking the rate of IGST on vessel Charter hire Charges?

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Case 29: Shilpa Medicare Limited (AAR Andhra Pradesh)

Query:

1.Whether the transaction would amount to supply of goods or supply of services or supply of Goods & Services?

2.Whether the transaction would cover Sl.No.2 of the Notification No.12/2017 – Central Tax (Rate) dated 28.6.2017?

3.Can we file GST ITC-02 return and transfer unutilised ITC from Vizianagaram, Andhra Pradesh unit to Bengaluru, Karnataka Unit?

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Case 30: DKV Enterprises Private Limited(AAR Andhra Pradesh)

Query: Whether the marketing and consultancy services supplied by the applicant are liable under export of service or not.

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Case 31: CMC Vellore Association (AAR Andhra Pradesh)

Query :

1.Tax liability on the medicines supplied to In-patients through pharmacy.

2.Tax liability on the medicines, drugs, stents, implants etc administered to in-patients during the medical treatment or procedure.

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Case 32: DEC Infrastructure and Projects (I) Pvt. Ltd.(AAR Andhra Pradesh)

Query:

1.Whether the above work of APIIC executed by the applicant after 22.08.2017 falls under the 18% rate of tax or 12% rate of tax?

2.If the work falls under 18% Rate of tax, then can the advance ruling authority guide the APIIC authority to reimburse the GST amount to the construction agency?

3.If the work falls under 12% Rate of Tax, then can we claim the refund of the GST amount which was paid excess while filing the GST returns from the CGST and SGST authority? (While filing the GST returns Tax paid @18%)

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Case 33: Sri Satya Sai Water Supply Project Board.(AAR Andhra Pradesh)

Query:

1.Whether the applicant qualifies as a ‘Governmental Authority’ under the Act and whether the services availed by it are exempt from the GST by virtue of Entry 3 in Notification 12/2017 (Rate), dt: 28.06.2017.

2.Whether the Applicant is not liable to remit any GST to its suppliers for any services it procures by virtue of its activities of supplying water for domestic purposes.

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Case 34: KPC Projects Limited(AAR Andhra Pradesh)

Query:

1.Applicability of GST Rate for construction of Millennium tower at Madhurawada, Visakhapatnam for information Technology and Communication Department, Government of Andhra Pradesh and through Nodal Agency APIIC. Clarification is requested for the applicable Rate of GST under works contract service

2.If GST should be payable @12%, whether a claim for refund be submitted in RFD-01.

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Case 35: Macro Media Digital Imaging Private Limited(AAR Andhra Pradesh)

Query:

1.Whether the transaction of printing of content provided by the customer, on poly Vinyl Chloride banners and supply of such printed trade advertisement material is supply of   goods.

2.What is the classification of such trade advertisement material if the transaction is a     supply of goods?

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Case 36: Deccan Tobacco Company(AAR Andhra Pradesh)

Query:

1.What is the rate of GST applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves?

2.What will be the applicable rate of tax if the applicant purchases tobacco leaves form other dealers who have purchased them from farmers, for the purpose of trading?

3.What will be the applicable rate of tax if the applicant segregates the tobacco into grades depending upon their size (width), colour /shade, length, texture of the leaf etc., and sells such graded tobacco leaf?

4.What will be the applicable rate of tax if the tobacco leaves are butted and sold to other dealers?

5.What is the applicable rate of tax if the applicant gets the tobacco leaves re-dried without getting them threshed and sold them?

6.What will be the applicable rate of tax if the applicant gets the tobacco leaves threshed and re-dried?

7.What will be the applicable rate of tax if the applicant gets the tobacco threshed and re-dried on job work basis at others’ premises and then sells such threshed and re-dried tobacco leaves to others?

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Case 37: GVS Projects Private Limited (AAR Andhra Pradesh)

Query:

1.Whether APSPDCL & APEPDCL is a Government authority/ Government Entity or not?

2.What is the applicable rate of GST on work agreement entered into with the APSPDCL &  APEPDCL.

3.Under which Notification the work would fall, for discharging the GST liability?

4.Whether for the value of materials recovered from RA bills issued on cost recovery basis by APSPDCL & APEPDCL is liable to tax under RCM as per Notification No.13/2017 Central Tax (Rate) dated 28.06.2017 or not ?

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Case 38: Sree & Co (AAR Andhra Pradesh)

1.Whether supply of print on flex is classifiable as supply of goods or service?

2.If yes, whether falls under HSN 4911 under entry no 132 of Schedule II of Notification 1/2017- CTR?

3.If answer to question 2 is yes, whether supply of print on flex non commercial purpose is also classifiable under HSN 4911 under entry no 132 of Schedule II of Notification 1/2017- CTR?

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Case 39: Sri Venkata Vijaya Durga Traders (AAR Andhra Pradesh)

Query : Whether Tamarind Seed attracts Nil Rate under HSN Code 1209 (Forest Trees Seed) or not.

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Case 40: Kalagarla Suryanarayana Son(AAR Andhra Pradesh)

Query: Whether Tamarind Seed attracts Nil Rate of Tax under HSN Code 1209(Forest Trees Seed) or Not.

Over the past 50 days, the transformative goods & services tax (GST) has evolved at a very fast pace. Once the rollout became a certainty, the government and stakeholders have moved in fast to tweak rules, revise taxes and introduce new features in a bid to progress on the stated motto of making India a unified market. Successive GST Council meetings, interactions with taxpayers and on-ground feedback have enabled smooth functioning of this new tax system that is young and

This article tries to refer to the agenda and minutes of 22^nd GST Council Minutes and the proposed draft circular, sight of which has been lost and at the time of 22^nd GST Council Meeting held on 6^th October 2017, it was thought fit to bring Cross Empowerment in GST Regime. The agenda and minutes also throw light about why the draft notification was not approved.

1. Agenda for 22^nd GST Council Meeting:

Agenda Note 9: Proposal for issuing notifications on cross-empowerment for ensuring single interface under GST

a) Proposed Notification for Cross Empowerment- The relevant Extract of the agenda is as follows:

The notifications on cross empowerment under the CGST Act, the SGST Act and the IGST Act along with the supplementary instructions, as suggested by the Single Interface Committee in its interim report, was placed before the GIC for approval in its 10th meeting on 28 September, 2017. The proposed notification on cross empowerment under the IGST Act creates exception for cross empowerment in cases where place of supply is under dispute as per the decision of the GST Council. The States, however contended that the issue of place of supply should be referred to the Council and that all three cross empowerment notifications under CGST, SGST and IGST Acts may be taken together in the next GST Council Meeting.

b) Why it was felt necessary to bring in the notifications for Cross Empowerment- The relevant Extract of the agenda is as follows:

3. It is submitted that there is a broad agreement on cross empowerment under the CGST and SGST Acts. If notifications on cross empowerment are kept in abeyance for want of agreement on IGST Act’s cross empowerment, the effort to ensure single interface would be in vain. Taxpayers are increasingly feeling the heat of delay in grant of refund. If they are required to approach both Central and State Tax Authorities for refund of unutilized input tax credit for exports, it would further accentuate their grievances

4. Therefore, it is proposed that notifications on cross empowerment, which have been prepared in accordance with the recommendations of the Council, be approved.

5. The three notifications at (Annexure-I) for the consideration and approval of the Council.

c) How did the draft Notification sought to bring in cross-empowerment- The draft notification sought to bring in cross empowerment as follows: The copy of the draft notification is reproduced as hereinbelow:

Agenda-for-22nd-Meeting-and-Draft-NotificationDownload

Agenda-for-22nd-Meeting-and-Draft-Notification

It can very well be seen that there were specific provisions for Section 67, 129, 130, All proceedings against a supplier or recipient of goods or services or both, who has remained un-registered although liable to be registered, Chapter XX and all matters other than ones mentioned.

Further, there was also ratification to assignment of taxpayers done between Centre and States which till today due to want of notification has not been authorized under any section of GST. The draft notification clearly provided that Assignment of registered persons refers to the distribution of registered persons between the central and state tax administrations, for exercising all administrative controls regarding enforcement of the provisions of the CGST Act, in such proportions and following such methods, as the Council may decide from time to time. 

There was also a mechanism proposed for information regarding intimation to furnished by the Commissioner to the jurisdictional Commissioner of the respective State Goods and Service Tax Act or the Union Territory Goods and Services Tax Act or vice versa on common portal or manually with due acknowledgement till such time the facility for uploading the said information is not available on the common portal.

This clearly shows that intent at that time was to bring in notification for clearly specifying cross empowerment and it was believed that without such notification cross empowerment was not be possible. The draft notification was sought to be issued under section 6 of CGST Act, 2017 and also referred to the assignment of the taxpayers between Centre and State. The question is why then the notification was not approved. For this we have to refer to the minutes of the Council Meeting wherein this agenda was placed so as to know whether there was any change of opinion or any other hurdle due to which the draft notification could not be brought and only notification relating to refund processing was brought.

2. Council Minutes for 22^nd GST Council Meeting-

a) Disagreement between the States with regard to the Place of Supply Rules- The relevant Extract of the minutes of the meeting are as follows:

The Commissioner (GST Policy), CBEC stated that it was proposed to issue notification on cross-empowerment prepared in accordance with the decisions of the Council taken during its 9th Meeting (held on 16 January 2017) and 21st Meeting (held on 9 September 2017). He stated that while there was a broad agreement for cross-empowerment under the CGST and SGST Acts, there was disagreement on the issue of cross-empowerment under the IGST Act in relation to the Place of Supply Rules.

b) Cross Empowerment was urgently required to enable for early grant of refund- The relevant Extract of the minutes of the meeting are as follows:

The Secretary stated that notification of cross-empowerment was urgently required to enable refund to the taxpayers and this notification could be issued.

It can be seen that cross-empowerment notifications were required to enable refund to the taxpayers. Had provisions of Section 6(1) been self sufficient and issuance of notification was only required to restrict the power of the officers only to Section 54 and 55 and not extend to Rule 96(IGST Refund), there would been no requirement for such urgency. As also there was no way that IGST Refunds would have come to SGST Officials since there was no mechanism neither at that time and nor till date that IGST Refunds can be applied to SGST or even to CGST Officials. Therefore, thinking at that time was that cross-empowerment notifications are required to enable processing of refund and not to restrict the powers of the SGST Officials.  

c) Notifications for Cross Empowerment for other matters could be deferred as there are differences over place of supply rules- The relevant Extract of the minutes of the meeting are as follows:

He added that due to persistent differences on cross-empowerment for the Place of Supply Rules issues under IGST, notification regarding cross-empowerment in respect of other matters could be deferred.

This clearly brings out that notification for cross empowerment was thought necessary at that time as well but since there was differences over place of supply rules, therefore notification for refunds were issued and rest were kept on hold until the differences were resolved.

d) Consensus over issuing notification for Cross Empowerment in case of issue of refund- The relevant Extract of the minutes of the meeting are as follows:

He stated that by cross-empowering States and Central tax officers for giving refund, it would be ensured that only one officer issued an order of refund for both CGST and SGST. The Council approved the proposal to issue a notification by the Central Government and the State Governments cross-empowering officers of the Central and State Government to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the central tax and the state tax and a similar notification to be issued under the IGST Act.

e) What was approved for Agenda 9 of the Council Meeting- The relevant Extract of the minutes of the meeting are as follows:

For agenda item 9, the Council approved the following:

i) To issue notifications by the Central Government and the State Governments, cross-empowering officers of the Central and State Governments to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the Central tax and the State tax. Similar notification to be issued under the IGST Act by the Central Government;

ii) Until the division of taxpayers is effected between the Central and State administration, an officer of the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant.

This again talks only about enabling cross empowerment for sanction of refund and not for restricting the powers to issue refund.

3. Conclusion– The above agenda and the council minutes throws light on many issues and how the provisions of section 6 were though to be implemented for cross empowerment and why they were not brought in as perceived. Any subsequent change in interpretation might be seen in light of the discussion in 22^nd GST Council Meeting.

E-Invoice cannot be generated for B2C Transactions-The category of transaction of “Business to Consumer (B2C)” invoices will not be considered and hence the API interface should not request for IRN for these transactions.

Document should not Start with following Number or Character-Document number should not be starting with 0, / and -. If so, then request is rejected.

Unique Invoice Number to be generated for each Financial Year-Supplier should ensure that the unique invoice number is being generated for the financial year for each invoice, in his ERP/manual system. The financial year is derived from the date of invoice. The financial year starts from 1st April and ends on 31st March.

Duplicate IRN requests are not considered- That is, if the IRN is already generated on particular type of document and document number of the supplier for the financial year, then one more IRN cannot be generated on the same combination.

E-Invoice cannot be generated for cancelled invoices and would have to be generated with new invoice number-E-invoice(IRN) cannot be re-generated for the cancelled e-invoice(IRN) also.

SEZ Supplier cannot generate E-Invoice-In case the supplier is SEZ unit, then he cannot generate e-Invoice.

E-Invoice to be generated by Supplier in case of Reverse Charge Invoices-“Reverse Charges” can be set as “Y” in case of B2B and SEZ invoices only and tax is being paid in reverse manner as per rule. Even in case of Reverse Charged invoices, the Supplier has to generate the IRN.

Validation of Recipient GSTIN-Recipient GSTIN should be registered and active, on the date of preparation of the document by the supplier.

Verification of First Two digits of GSTIN of Supplier /Recipient with State Code-First two digits of the Supplier / Recipient GSTIN should match with the state code passed in the Supplier / Recipient details accordingly except if supply type is exports wherein Recipient state code will be 96.

Validation of PIN Code-PIN Codes are validated against the States, they belong by matching the complete pincode against state master. If the PIN Code does not exist in the master database of the e-invoicing system, and the first 3 digits of the PIN code is matched with the State as per the pattern of PIN code-to-State mapping defined by postal department, then IRN gets generated.