TaxTMI 
TaxTMI 
2018 (10) TMI 1242
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....r GST law or whether GST would not be let-liable on the said movement as per the clarification issued by the CBEC vide Circular No. 21/ 21/ 2017 - CGST read with Circular No. 1/ 1/ 2017 - IGST? 2. In the present situation and under the given facts, if GST is payable on the aforesaid transaction, whether the recipient office of SML duty registered under GST receiving such cranes for further supply on hire charges would be eligible to avail input tax credit of GST charged? 3. In case when a lyre-mounted crane or crawler crane is moved from one GST registered office of SML to another registered office of SML only for upkeepment and maintenance purpose, without any further supply to unrelated customers, whether such movement of crane would be treated as "taxable supply" under the GST law or can it be said that it would not tantamount to "supply" as per clarification issued by the CREC vide Circular No. 21/ 21/ 2017 - CGST read with Circular No. 1/1/2017 - IGST? 4. If the transaction stated above in question 1 is liable to tax, whether GST would be payable Only on the movement of tyre-mounted cranes being goods on wheels or GST would also be payable on movement of both types of....
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....ransported on trailers, from one location to another, in knock down condition. 5. As the movement of cranes involves significant time and cost, SML has set up various branches ("SML branch offices") across India at strategic locations to minimize transportation time and costs. II. Under GST, SML has obtained registration for 10 locations across India, including its head office ("SML Maharashtra") located in Pune, Maharashtra. III. Brief facts of Existing business model in applicant's case- 6. SML has multiple offices across India from where it undertakes business activities. At present, SML branch offices receive enquiries from various customers for supply of cranes on hire charges. SML branch offices negotiate with customers and receive final work orders from customers. 7. The title and ownership of all the different types of cranes along with their components vest with SML Maharashtra. Therefore, on receipt of the final work order, all the SML branch offices in turn raise Internal work orders on SML Maharashtra to provide requisite cranes on hire charges along with appropriate support and assistance to various customers across India. 8. with the introduction....
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....or each type of crane given on hire charges, the crane operator maintains a separate monthly log sheet at the customer/ project location, wherein the daily and hourly details of crane usage and idle time are maintained, based on which the monthly service invoice is raised by SML branch offices on respective customers. Further, an invoice from SML Maharashtra is issued to the SML branch office and the value considered for levying GST is approximately 95% of the value charged to the customer by the SML branch, following the principle under Rule 28 of the Central Goods and Services Tax Rules, 2017 ("CGST Rules") read with section 15 of CGST Act. 16. In most cases, cranes are moved from one GST registered office of SML to another registered office when there is an underlying work order received by the recipient branch office. However, in some cases, it may happen that the crane is moved from one registered branch office to another registered branch office for temporary upkeepment and maintenance purposes. 17. As the title and ownership of all cranes vest with SML Maharashtra; therefore, for such upkeepment and maintenance activity, the respective SML branch office providing such ....
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...., the input tax credit availed is required to be reversed in case payment is not made to the vendor within 180 days. 22. Further, as per Rule 37 of the CGST Rules, 2017, in case of supplies made between distinct persons as specified under section 25(4) of the CGST Act, it shall be deemed that the payment has been made and no input tax credit reversal is required to be made for non-payment of consideration. Hence, the recipient SML branch offices can avail credit of IGST charged by SML Maharashtra on the value of hire charges charged on the invoice. Clarification issued under Circular NO. 21/ 21/ 2017-CGST read with Circular No. 1/1/2017-IGST 23. The GST Council in its 23rd meeting held on 10 November, 2017 clarified that inter-State movement of goods like rigs, tools, spares and goods on wheels like cranes, not being in the course of furtherance of supply of such goods, does not constitute supply. This clarification was issued to give major compliance relief to industry, as there are frequent inter-State movement of such kind in the course of providing services to customers or for the purposes of getting such goods repaired or refurbished or for any self-use. Service provi....
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....questions as stated above, and hereby, submit this application before the Hon'ble Authority of Advance Ruling. 30. The Applicant craves leaves to submit such further facts at or before the hearing of the application as may be relevant. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission of the Assessing authority as follow - The Applicant hereby seeks to determination in respect of the following questions: Qu. 1). Based on the facts and business model adopted by Sanghvi Movers Limited ("SML" or "Applicant" or "the Company") under the GST regime as discussed below in detail, whether movement of tyre mounted cranes or crawler cranes from one GST registered office of SML to another registered office of SML for further supply on hire charges to -customers would be treated as '"taxable supply" under GST law or whether GST would not be leviable on the said movement as per the clarification issued by the CBEC vide Circular No. 21/21/2017-CGST read with Circular No. - IGST? Answer: - As per section 24(1) (i) of the CGST act, persons making any inter-state taxable supply shall be compulsorily required to be registered under the CGST Act. As per section of ....
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.... actually paid to the Government; and d. Tax returns have been furnished. Further, as per second proviso to Rule 37 of the CGST Act, input tax credit shall be eligible subject to payment of the total value of supply along with tax amount to the supplier within 180 days from the invoice date. As per my opinion, the input tax credit to SML branch offices will not applicable because in this case supplies made without consideration as specified in CGST Act, Qu. 3. In case when at tyre-mounted crane or crawler crane is moved from one GST registered office of SML to another registered office of SML only for upkeepment and maintenance purposes without any further supply to unrelated customers, whether such movement of crane would be treated as "'taxable supply" under the GST law or can it be said that it would not tantamount to "supply" as per clarification issued by the CBEC vide Circular No. 21/ 21/ 2017 - CGST read with Circular No.- 1/1/2017 IGST? Answer:- As per Circular No. 21/21/2017- CGST read with Circular No. 1/1/2017-IGST , inter-state movement of goods on wheels such as cranes between distinct person as specified in section 25(4) of the CGST Act, is no....
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....s levied under any law for the time. As per my opinion, in such a case of supply of Goods and services between deemed district persons, the value of goods or services determined as open market value, 04. HEARING The case was taken up for preliminary hearing on DT. 10.04.2018, with respect to admission or rejection of the application when Sh. Nitin Vijaivergia, C.A. along with Sh. Vipin Bang and Sh. Abhijit Savarkar, G.M. Taxation appeared and made contentions as per details in their ARA The jurisdictional officer, Sh. B K. Shedge, Dy Commissioner of S.T. (PUN-VAT-E-810) Pune appeared and stated that they would be making submissions in due course. The application was admitted and final Hearing was held on 16.05.2018, Sh. Nitin Vijaivergia, C.A. along with Sh. Vipin Bang and Sh. Abhijit Savarkar, G.M. Taxation appeared made written submissions. The jurisdictional officer, Sh. B K. Shedge, Dy. Commissioner of S.T. (PUN-VAT-E-810) Pune appeared and made written submissions. 5 OBSERVATIONS: We have gone through the facts of the case and various written submissions made by the applicant and jurisdictional officer during the course of the proceeding before us. We find....
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....te core business of the applicant. However, in some cases, the crane is moved from one registered branch office to another registered branch office for temporary unkeepment and maintenance purpose. In any case, however, the ownership and title to the crane vests with HO. Whenever crane moves from SML HO to SML branch office for further supply on hire, the invoice is issued by SML HO to SML branch office and the value considered For levying GST is approximately 95% of the value charged to customer by the branch. Whereas when crane move from one registered location to another registered location for upkeepment and maintenance activity the respective branch office providing such services levies charges on H.O. along with applicable rate of GST. ON this factual matrix we have been called upon to answer the questions made in the ARA. We now deal each questions as below: Que: 1 Based on the facts and business model adopted by Sanghvi Movers Limited ("SML" or "Applicant or "the Company") under the GST regime as discussed below in detail, whether movement of tyre mounted cranes or crawler cranes from one GST registered office of SML to another registered office of SML for furth....
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....the title in goods is a supply of goods; (b) any transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services; (c) any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods. 2. Land and Building (a) any lease, tenancy, easement, licence to occupy land is a supply of services; (b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. 3. Treatment or process Any treatment or process which is applied to another person's goods is a supply of services. 4. Transfer of business assets (a) where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person; (b) where, by or under the direction of a....
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....gation to refrain from an act, or to tolerate an act or a situation, or to do an act; and (f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. 6. Composite supply The following composite supplies shall be treated as a supply of services, namely:- (a) works contract as defined in clause (119) of section 2; and (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. 7. Supply of Goods The following shall be treated as supply of goods, namely:- Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration. From the co-joint reading of section 7 and schedule - II applicant's activity of providing crane on hire is nothing but transfer of right in cranes without the transfer of title thereof and is therefor....
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.... service between two distinct person and liable to pay tax under the provisions of IGST Act. Further we find that the issue of IGST exemption on interstate movement of various modes of conveyance between two distinct person as specified in Section 25(4) of the GST Act, 2017 for carrying goods or passengers or both; or for repair or maintenance except in cases where such movement is for further supply of the same conveyance was examined by the Board vide circular No. 1/1/2017 DT. 7.7.2017. And it was clarified that such movement may not be treated as supply and therefore would not be leviable to IGST. Further the Board in order to give effect to the discussions held in GST councils meeting held on 10th November 2017 pertaining to interstate movement of rigs, tools and spares, and all goods on wheels [like cranes] issued circular No. 21/21/2017- GST and clarified that the circular 1/1/2017- IGST shall mutatis mutandis apply to interstate movement of such goods, and except in cases where movement of such goods is for further supply of same goods; such interstate movement shall be treated 'neither as a supply of goods or supply of service' and consequently no IGST'....
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....circular interstate movement of cranes except in cases where movement of such good is for further supply of same goods, shall be treated 'neither supply of goods or supply of service. The reliance by the applicant on this circular to claim interstate movement of cranes as exempt from levy of IGST is misplaced as the cranes moves form SML HO Maharashtra to SML branch in another state for further supply of same cranes. For above deliberation we conclude that IGST would be leviable on the interstate movement of both type of cranes from SML HO to SML branch offices registered in another state for further supply on hire charges to customer and thus the circular 21/21/2017-IGST is not applicable to the facts of the present transaction. Que: 2 In the present situation and under the given facts, if GST is payable on the aforesaid transaction, whether the recipient office of SML duly registered under GST receiving such cranes for further supply on hire charges would be eligible to avail input tax credit Of GST charged? This question is in respect of recipient office of SML registered under the GST Act in a taxable territory other than Maharashtra State. We are, therefore, of the o....
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....red office in case the said movement is considered to be a taxable supply? We have already stated and held that the transaction between SML HO and SML branch office is supply having regards to Section 25(4) and Schedule I of the GST Act. As per section 25(4) of the GST Act, as mentioned above, the SML HO and SML Branches are distinct persons for the purpose of this Act and as per schedule-I supply even if made without any consideration between two distinct persons as specified in section 25(4) is also supply when made in the course or furtherance of business. Applicant has explained the method of invoicing in his submissions. As per the method SML branch office on the basis of monthly log sheet raise invoices on their respective customer and on the basis of same, SML Maharashtra that is applicant in turn raises taxable invoice on the respective SML branch offices. SML Maharashtra recovers hire charges equivalent to 95% of hire charges recovered by SML branch offices from their respective customers. Applicant discharges GST as applicable on the said 95% value. On this factual matrix we have been called upon to answer the impugned question. As per section 15 of the GST Act, the....
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....ashtra to SML Branches is for further supply of such crane on hire by the SML Branches to customers. As such we presume that SML Branches are eligible for full input tax credit. In such situation and as per Second proviso to Rule 28 of the (GST Rules, the value declared in the invoice shall be deemed to be open market value. In view of this we do not find any irregularity in the value of supply considered by the applicant for levying GST which is approximately 95% of the value charged by SML branches to the Customer of the branches. 06. In view of the deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-43/2017-18/B-50 Mumbai, dt. 15/06/2018 For reasons as discussed in the body of the order, the question is answered thus Question 1. Based on the facts and business model adopted by Sanghvi Movers Limited ("SML" or "Applicant" or "the Company') under the GST regime as discussed below in detail, whether movement of tyre mounted cranes or crawler cranes from one GST registered office of SML to another registered off....