GST Ruling: Contractors & Permit Holders Liable for 5% Tax on Lisa/Resin Activities

The ruling confirms that all activities related to the extraction, transportation, and sale of Lisa/Resin are liable under GST. The contractor winning the bid and the individual permit holder are both liable for GST on the composite supply. The applicable GST rate for this composite supply is 5%. The judgment clarifies the liability, rates, classification codes, and conditions for TDS deduction, ensuring compliance with GST laws for contractors and individual permit holders involved in these activities.

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Issues Involved:
1. Liability of the entire work under GST.
2. Liability for GST - department or bidder.
3. Applicable rate of GST for the activity.
4. Classification of HSN/SAC code for the activity.
5. Point/time of supply for GST payment.
6. Amount on which GST should be paid.
7. GST TDS deduction by the department from payment made to the bidder.
8. Requirement of GST registration for contractors.
9. Conditions for GST TDS deduction for contracts less than Rs. 10 Lakh or unregistered persons.

Detailed Analysis:

1. Liability of the Entire Work under GST:
The ruling confirms that all activities related to the extraction, transportation, and sale of Lisa/Resin are liable under GST.

2. Liability for GST - Department or Bidder:
- Category-1: The contractor, who wins the bid and undertakes the extraction and transportation of Lisa/Resin, is liable for GST on the composite supply.
- Category-2: The individual permit holder, who extracts and transports Lisa/Resin from private land, is also liable for GST on the composite supply.

3. Applicable Rate of GST for the Activity:
The activity by both contractors and individual permit holders is considered a composite supply, with the principal supply being Oleo Resin (Lisa). The applicable GST rate for this composite supply is 5% (2.5% CGST + 2.5% SGST).

4. Classification of HSN/SAC Code for the Activity:
- Services: Goods transport service is classified under HSN code 9965.
- Sale: Oleo Resin (Lisa) is classified under HSN code 13019049.

5. Point/Time of Supply for GST Payment:
GST is payable by the applicant at the time of issuing the invoice, which occurs at the final sale through open auction. The time of supply is determined by the earliest of the following dates:
- Date of issue of invoice by the supplier.
- Last date on which the supplier is legally bound to issue the invoice.
- Date on which the supplier receives the payment.

6. Amount on Which GST Should Be Paid:
The taxable amount includes all charges such as loading, unloading, tapping, and transportation. The value at the time of final sale (after open auction) is considered for GST, and no deductions are allowed from this taxable value.

7. GST TDS Deduction by the Department:
As per section 51 of the CGST Act, the department must deduct TDS at 2% on payments made to suppliers of taxable goods or services where the contract value exceeds Rs. 2.5 Lakhs.

8. Requirement of GST Registration for Contractors:
Every contractor/individual permit holder must get registered under GST if their aggregate turnover exceeds the threshold exemption limit as per section 22 of the CGST Act. However, those with an annual turnover within the threshold exemption limit are not required to register, as per Section 23 of the CGST Act.

9. Conditions for GST TDS Deduction for Contracts Less Than Rs. 10 Lakh or Unregistered Persons:
TDS at 2% is required to be deducted on payments made to suppliers of taxable goods or services where the contract value exceeds Rs. 2.5 Lakhs, regardless of whether the supplier is registered or unregistered.

Conclusion:
The judgment clarifies the applicability of GST on various activities related to the extraction, transportation, and sale of Lisa/Resin, specifying the liable parties, applicable rates, classification codes, and conditions for TDS deduction. The ruling ensures compliance with GST laws by both contractors and individual permit holders involved in these activities.

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