TaxTMI 
TaxTMI 
2018 (8) TMI 1073
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....imilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / be mentioned as being under the "GST Act". FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE OUESTION(S) ON WHICH ADVANCE RULING IS REOUIRED. "Our company is in the activity of providing services in the nature of warehousing, wherein we allow to store the material or goods of our client on specific compensation allowed under Bombay Warehousing Act, for which state license is provided to us to carry on the said activity" STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS AS THE CASE MAY BE, IN RESPECT OF AFORESAID QUESTION(S)(i.e.) APPLICANT'S VIEW POINT AND SUBMISSIONS ON ISSUES ON WHICH THE ADVANCE RULING IS SOUGHT) AND AS PER SUBMISSION DT. 10.04.2018 Brief Facts submitted by applicant on 10.04.2018 1. M/s. Nutan Warehousing Company Pvt Ltd (hereinafter referred to as applicant) i....
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....arehouse as the warehouse is used for warehousing of tea, an agricultural produce. Under this background, the applicant had requested for advance ruling on -- "Whether the supply of warehouse services used for packing & storage of tea, under above mentioned facts & circumstances was/is exempted vide Serial No 54(e) of Notification No. 12/2017- Central tax (rate) or otherwise." 7. Admissibility of Application-- The application is filed under Rule 97(1) of the Central Goods & Service Tax Act, 2017 (hereinafter referred to as the Act) for seeking advance Ruling on question framed above, under Rule 57(2) (g) of the Act 8. Further, we affirm that neither the question raised had been decided nor the question raised is pending for ascertainment in any proceeding against us under the Act. Hence, we are eligible for seeking advance ruling on the question raised by us. Merit- 9. Applicant is owner of Warehouse given on rent to M/s Unilever India Exports Ltd on specific compensation allowed under Bombay Warehousing Act. M/s Unilever India Exports Limited (hereinafter referred to as Unilever) is procuring tea in bulk either from public tea auctions or directly from manufacturers....
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....the human consumption and it cannot be sold in the open market for human consumption. The raw tea leaves are withered by exposure in the shadow of the sun or by heating in trays until pliable. Thereafter the leaves are rolled by hand or machine in order to break the leaf cells and liberate the juices and enzymes. Finally, the leaves are completely dried either by further exposure to the sun, over fires, or in a current of hot air then the tea leaves are fermented in baskets, glasses and in clothes. Thereafter the leaves were then subjected to grading with sieves of various sizes. The said leaves are finally roasted with charcoal for obtaining suitable flavour and colour. Thereafter the said tea is packed in the bulk packs. 12. The processing of the tea makes it marketable by minimal process they are made fit for human consumption. All the above processes are necessary for the purpose of saving the tea leaves from perishing. In case the above process is not carried out immediately the entire tea leaves would be perished. The process, as indicated above, at no point of time crossed that limit and robbed the tea leaves of their character of being and containing as such substantiall....
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....sh from the tea gardens. Nobody eats tea-leaves. It is meant to be boiled for extracting juice out of it to make tea liquor. Tea-leaves are, therefore, only fit for marketing when by a minimal process they are made fit for human consumption. Processes were necessary for the purpose of saving the tea-leaves from perishing, making them fit for transporting and marketing them. The process applied was minimal. Withering, crushing and roasting the tea-leaves will be surely necessary for preserving them. The process of fermentation or final roasting with charcoal for obtaining suitable flavour or colour and also the process of grading them with seives were all within the region of minimal it no point of time it crossed that limit and robbed the tea-leaves, the agricultural produce, of their character of being and continuing as such substantially. These processes are normally done by the cultivator or the producer, hence the second ingredient is also satisfied. 17. The process undertaken does not alter its essential characteristics. The tea leaf remained what it always was. It was tea leaf when selected and plucked and it continued to be tea leaf when after the process of withering,....
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....ation No. 12/2017-CT (Rate) dated 28.6.2017. The said circular had clarified that the "Tea is not an agricultural produce", hence loading, unloading, packing, storage or warehousing of tea is not exempted under Notification No. 12/2017-CT (Rate) dated 28.6.2017. The said view expressed by the CBEC is contrary to the Notification No. 12/2017-CT (Rate) dated 28.62017 as explained supra. The taxability cannot be fastened by issuance of a circular, if some activity is exempted by the Notification. 22. Even the activity of warehousing was exempted under Service Tax regime as well. Therefore, tea was an agricultural produce during entire service tax regime. In light of the above, he pray for passing the appropriate order. Addition submission by Applicant dated on 11.05.2018. Please refer to our application reference No. 30 dated 23.2.2018 in respect of which, hearing was held before you on 24.4.2018 and our earlier letter dated 3.5.2018 on the above subject. During the hearing, we were directed to submit documents/data from M/s Unilever Export, Pune within ten days from the date of hearing. Accordingly, M/s Unilever Export had been requested to submit the same. We are p....
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....ver India Export Ltd and the warehoused goods Tea is agricultural produce hence the services provided by them are exempted as Per Order No. 1/2002 dated 01.08.2002 and submitted a extract of LOP NO. PER:99(2001)/SEEPZ/EOU/80/2001-02/5 in which name of the applicant and items to be stored in Warehouses is mentioned Copy of the letter issued by SEEPZ is enclosed. (Anne. II) Taking into consideration the activities carried out by applicant and clarification issued vide Circular dated 15.11.2017, it appears that the exemption provided at Sr. No.54 to Notfn No.12/2017 (Anne, III) is not applicable to the applicant since 01/07/2017 in GST. However applicant is registered under GST and paying GST. QUESTION NO. 15- Our Company is in the activity of providing Services in the nature of warehousing for loading, unloading, packing, storage or warehousing of agricultural produce therefore we sought an advance ruling regarding applicability of exemption to such activity For applicability of exemption to the activities carried out by the applicant, the definition of agriculture produce, clearance of tea stored in EOU and category of the service recipient is to be discussed as under. T....
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....ome received from M/S. Unilever India for the period 2013-2014 to 2015-2016 is as under - Category of service provided 2013-2014 2014-2015 2015-2016 Warehousing charges 2979264 3507604 55000 Service charges 19440003 19059D984 23037450 Lease Rent 8947365 7572675 8883305 Other charges 340920 167280 559320 Transport charges 11310000 3069800 6288000 Zero copies of extract of Note 14 of Balance Sheet for 2013-2014 to 2015-2016 and Zerox copy 26AS for the years 2015-2016 and 2016-2017 enclosed as Anne. IV The Legal provision in respect of service provided to EOU by DTA unit is as under- Para 6.11(c)(ii) of Foreign Trade Policy 2015-2020, the EOU unit shall be entitled to following (i)... (ii).. (iii). (iv) Cenvat Credit on Service Tax paid That means the service provided by the service provider to EOU is Taxable & therefore the Deptt have called for the documents for investigating the case in detail for recovery of govt dues since 01.07.2012. Applicant is submitting the documents in piece meal basis which cause incontinence in enquiry therefore Deptt. have issued summons calling fo....
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....f documents. However, the applicant have filed application for advance ruling on 25th January 2018 which is much later than the action initiated by deptt. for investigation. It is also noticed that the Registered office of the applicant as per Service Tax Registration is at Krishi Bhavan, 1379, Bhavani Peth, Pune- 411042 falling under the jurisdiction of Swargate Division. However, the applicant has willfully shown the address of Registered office at the time of GST Registration as Krishi Bhavan, 1379, Bhavani Peth Pune 411002 by quoting wrong PIN code falling under Shivajinagar Division to mislead the deptt. Thus the applicant, by mentioning the wrong Pin Code as 411002 instead of 411042 for the same address in GST Registration, the applicant has tried to mislead the deptt. for hiding the evasion made in past period from 01/07/2012 to 30.06.2017 with intention to make the loss to the Govt. exchequer. Applicant vide letter dated 19.03.2018 reported that the enquiries by various officers were conducted and enclosed copies of correspondence but not enclosed the copies of decision of enquires. On perusal of the said letters, it is observed that the instant issue of evasion of ta....
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....tivation and sale of green tea leaves is falling under Agricultural activity and Activity of purchasing tea leaves and manufacture and sale of tea is falling under Business activity for the purpose of Computation of Income Tax under Income Tax Act. In the instant case, the manufacturing EOU unit is procuring raw tea, manufactured in the factory and sale in the open market as well as in overseas countries, the service provided by the applicant to Business activity is not treated as service provided to agricultural produce hence there is not exemption from payment of service tax/GST. ii) High Court Decision in the case of Brook Bond Lipton India Ltd. Vs State of Karnataka 109 STC 265 in which it was stated that packing led to value addition for the purpose of excise and sales tax and that it was a possible view that packaged blended tea produced in the Industrial unit of the appellant is a manufactured product in which packing material are inputs. The contents of the exemption in Sr.No.54 of Notfn No. 12/2017 dated 28.06.2017 are as under Sr. 54 -Services relating to cultivation of plants and rearing of all life forms of animals, except the reading of horses, for foods, f....
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....to the Notfn. No. 12/2017-Central Tax (Rate) As per Sr. No. 24 of Notification No.12/2017, the service provided by way of loading, unloading packing, storage or warehousing of rice are exempted from payment of GST. There are no exemption for the services provided by way of loading, unloading, packing ,storage or warehousing of "Tea the issue of taxability of Service Tax already decided by issuing Notfn/circulars the question raised by the applicant can be answered in the negative. The ratios of judgments cited by the applicant during the personal hearing held on 24.04.2018 are irrelevant to the issues determined by the applicant for seeking advance rulling, The details of the judgments cited and how there are irrelevant are discussed as follows- a) Supreme Court in the case of Commissioner of Sales Tax Vs. D.S. Bist and others dated 11.09.1979 Issue-Assessee, agriculturist and having owned Tea Garden grown tea leaves on his own land, after carrying out some kind of process or treatment, tea is sold therefore the sale of tea effected by him was exempted from sales tax under the proviso to the Act. The Sales Tax authorities rejected the assesee 's contention. Decis....
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....in the facts of applicant's case. On going through the letter dated 11.05.2018 submitted by the applicant to Advance Ruling Authority along with the letter of M/s. Unilever Export dated 9.7.2014 mentioning the details of manufacturing activities, it appears that the applicant is providing various services to the manufacturing unit, whereas the exemption claimed by the applicant is applicable to support services provided to Agriculture, hence applicant is not eligible the exemption provided in Sr.No.54(e) to Notification No. 12/2017-CentraI Tax(Rate). It is therefore requested to consider the Supreme Court's decision mentioned above, provisions of CGST/SGST, Notification No-01/2017 dated 28.06.2017, Notification No.12/2017 dated 28.06.2017 and exemption at Sr. No. 24 of Notification No. 12/2017 and manufacturing activities carried out at manufacturing units while answering the questions raised by the applicant . 04. HEARING The case was taken up for Preliminary hearing on dt. 28.03.2018 with respect to admission or rejection of present application when Shi Ghanshayam L Navalakha, Director alongwith Sh Bhushan Patil, C.A. appeared and contended for admission of ap....
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....ivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of-- (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun dryings fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; Nil Nil (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or....
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....oming checks as per; sampling plan 3. Issue of QC Cleared Material 4. Assembly of Raw material as per Bled Order Cross checking of assembled Tea 5. Tipping of Tea over Magnetic Grid Inspection while tipping 6. Conveying under closed condition 7. Vibratory sieving Perforated Mesh : 3 mm 8. Conveying thru bucket elevator to feed hopper 9. Transferring teas to Blend Drum & Blending Under covered condition 10. Conveying and drawing Blended Tea into Mobile Storage Hopper Closed Hopper, Blended tea checked for sensorial and other Lab clearance 11. Placing Mobile Hopper on machine chute having Mesh and Magnetic Grid 5000 Gauss Strength. 12. Filling tea into Tea bags on Constanta Machine 13. Auto filling of Tea bags into Inner carton Online Quality checks for Tea bag Quality 14. On line Lid closing of Inner carton 15. On line Laser Coding on Inner carton 16. On line over wrapping of Inn....