2020 (3) TMI 982 - AAAR - GST

Appeal Dismissed for Filing Delay Upholding Statutory Timelines

In Re: M/s. The Deputy Conservator of Forests, Bangalore Urban Division

In Re: M/s. The Deputy Conservator of Forests, Bangalore Urban Division - 2020 (35) G.S.T.L. 519 (App. A. A. R. - GST - Kar.) Issues Involved:1. Whether the service of “logging” attracts GST under the CGST Act, 2017.2. Tax implications for the sale of forest produce or other goods by the Karnataka Forest Department when the buyer is registered or based outside Karnataka.Issue-wise Detailed Analysis:Issue No. 1: GST on Logging ServicesThe appellant, a government department, performs logging operations involving the harvesting of trees planted or naturally regenerated under the management of the Karnataka Forest Department. The primary question was whether these logging services attract GST.The Advance Ruling Authority ruled that logging services are taxable under the GST Acts, irrespective of whether the trees were planted by the Forest Department or grew naturally. The appellant contended that logging operations should attract a nil rate of tax under entry Sl.no. 24 of Notification No. 11/2017-Central Tax (Rate), which pertains to support services to agriculture, forestry, fishing, and animal husbandry. They argued that logging operations are part of forestry support services and should not be classified under manufacturing services, which attract higher GST rates.The appellant emphasized that logging does not constitute manufacturing since it does not change the basic characteristics of the product. They argued that logging is an intermediary production process related to forestry, covered under entry No. 24, and should attract a nil rate of tax. They further claimed that the Advance Ruling Authority's decision was incorrect and not in harmony with the notification's wording.Issue No. 2: Tax on Inter-State SalesThe second issue concerned the tax treatment for the sale of forest produce or other goods by the Karnataka Forest Department when the buyer is registered or based outside Karnataka. The Advance Ruling Authority ruled that such transactions are intra-State supplies attracting CGST and SGST, regardless of where the goods are taken by the recipient after the supply is completed.Personal Hearing and Delay in Filing Appeal:During the personal hearing, the appellant reiterated their submissions and argued that logging operations should be considered support services to forestry. They also sought condonation of delay in filing the appeal, citing the receipt of the advance ruling order on 05.10.2019 and filing the appeal on 04.12.2019, which they claimed was within the permissible period when excluding the date of receipt.Discussion and Findings:The appellate authority examined the delay in filing the appeal. The appeal was filed beyond the prescribed period of thirty days from the date of communication of the advance ruling order. The authority confirmed that the order was received on 04.10.2019, and the appeal was filed on 04.12.2019, one day after the condonable period of thirty days.Citing various judicial decisions, the appellate authority held that they could not condone the delay beyond the permissible period. The Supreme Court's interpretation of similar provisions in other statutes confirmed that appellate authorities have no power to condone delays beyond the statutory period.Conclusion:The appellate authority dismissed the appeal on grounds of time limitation, without discussing the merits of the issues in appeal. The order emphasized the strict adherence to statutory timelines and the limited powers of the appellate authority to condone delays.