TaxTMI 
TaxTMI 
2018 (8) TMI 1859
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....n behalf of farmer. The auction of agricultural produce is held in presence of Market Committee officials and Traders intend to buy the produce. Once the auction is completed the agent gets the goods cleaned from dust and makes the weighment of the goods. Buyers then lift the goods and the liability to pay for the goods arise immediately.  3. The highest bidder lifts the goods after obtaining the Form-I (title goods) from the commission agent and make transportation of its own course. 4. The consideration for goods is auction price which is also recorded by officials of Market Committee and the consideration of services like cleaning, weighment is at agreed price, which is uniform whole Grain Market on basis of type of crop, and all the service charges along with the commission is mentioned by the commission agent in the Title document called as Form I. The agent also issues the Form J to the farmer mentioning the detail of buyer and price at which the bidder had purchased the goods due to highest bid. 5. The commission agent collects the payment from the buyer on behalf of the farmer and remits the same to the farmer. In case the commission agent....
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.... Notification No. 121 /ST-2, dated 14-11-2017 issued under Haryana Goods & Services Tax Act, 2017 (hereinafter referred as HGST) read with corresponding Notification No. 43/2017, dated 14-11-2017 issued under Central Goods & Services Tax Act, 2017 (hereinafter called as CGST). 3. Applicant's interpretation of law and/or facts, in respect of the "foresaid question(s) 1. The taxes on the purchase of raw cotton are duly being deposited by the buyers of the goods which as per applicant is correct interpretation of law. 2. The commission agent is only supplying the services and delivery of goods is naturally bundled with provision of service which make this case as Composite supply and services of agent being predominant service is exempt and hence supply of such goods is tax free as far as commission agent is concerned due to services being exempt. 3. The farmers had been exempt from the levy of tax on agricultural produce. Thus neither the farmer and nor the commission agent is liable to collect and pay tax. 4. As per circular issued by C.B.I. & C. (earlier Central Board Of Excise & Customs) titled as 'GST (Goods and Services Tax) Pure Agent Co....
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....nsactions - there is need of supplier and recipient.  Hence in the view of applicant the question is to be determined the basis of combined reading of definitions of supplier, recipient, supply, consideration and intent of law and not only on the basis of the literal meaning of word recipient and thus it is requested to provide the correct interpretation of law by Advance Ruling u/s 97. 4. Comment of the Officer under Section 98(1) of the CGST/HGST Act, 2017 The Deputy Excise & Taxation Commissioner, Sirsa being the jurisdictional officer had submitted his comments as required under Section 98(1) of CGST/HGST Act, 2017 as under : - 1. It is a fact that commission agent receives the supply from farmer/ agriculturist i.e. from a unregistered person. 2. As per definition contained in Section 2(93) of HGST Act, the commission agent is recipient of supply of goods. The provisions of Section 2(93) of HGST Act are reproduced as under (a) Where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) Where no consideration is payable for the supply of goods, the person to whom the goods are ....
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.... Act, tax shall be levied on all the intra-State supplies of goods or services or both on the value determined u/s 15 of GST Act and shall be collected and shall be paid by the taxable person. Thus in view of Section 9(1) of GST Act, commission agent being a taxable person shall be liable to pay tax on the value so determined u/s 15 of HGST Act. 7 From the above points mentioned at Sr. Nos. 1 to 6, it is obvious that commission agent shall first deposit the tax as reverse charge being recipient and shall reflect in the relevant returns, the details of reverse charge deposited and thereafter shall work out his tax liability on the supply of goods to be made either to factory owner or 'Pucca Arhatia' and shall get the benefit of amount of tax paid as reverse charge after due verification of payment of tax. 8 Besides above submissions, even if the commission agent falls in the definition of pure agent, though it does not so fall, even then he is compulsorily registerable as per provisions of Section 24 of HGST Act. The relevant part of the provisions of Section 24 of HGST Act are reproduced as under : 24 "Notwithstanding anything contained in sub-sect....
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.... Raw Cotton, i.e., Narma and Oil seeds which attract 5% GST. 8. Since, the Government, vide Notification No. 43/2017-Central (Rate), dated 14-11-2017 and corresponding State Notification No. 121/ST-2, dated 14-11-2017 had inserted Entry 4A in Notification No. 4/2017-CentraI Tax (Rate), dated 28-6-2017 and corresponding State Notification No. 38/ ST-2, dated 30-6-2017 to include raw cotton on which tax became payable under reverse charge mechanism by the recipient of supply, i.e., any registered person. It is in view of this amendment that the applicant wants a clarity on the issue whether they can be considered as recipient of supply for the purpose of paying tax on reverse charge on supply of raw cotton by way of providing their services for sale and purchase of goods (raw cotton in this case) between the farmer and the registered purchasers. 9. As per the fact understood by us a farmer sells it's agricultural produce by utilising the services of the applicant who is a commission agent as per the APMC Act of the State. The applicant facilitates buying and selling of agricultural produce between the farmer and the buyers and receives by way of remuneration, a comm....
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....nerally a commission agent (Kachha Arhatia) under the APMC Act makes supplies on behalf of an agriculturist. Further, as per provisions of clause (b) of sub-section (1) of Section 23 of the CGST/HGST Act, 2017 an agriculturist who supplies produce out of cultivation of land is not liable for registration and therefore, cannot be regarded as 'Taxable Person' in terms of clause (vii) of Section 24 of the CGST/HGST Act, 2017. Thus, a commission agent who is making supplies on behalf of such agriculturist, who is not a taxable person, is not liable for compulsory registration under clause (vii) of Section 24 of the Act ibid. 12. However, the term "agent" has been defined under sub-section (5) of Section 2 of the CGST Act as follows : "agent" means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by Whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another. The term 'Arhatia' used in the above definition is wide enough to include a 'Kachhha Arhatia'. The business of a Kachha Arhatia as explained by the applicants....
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....ction 23, if the supply of agricultural produce, and/or other goods or services supplied by them are not liable to tax or are wholly exempt under GST. However, in cases where the supply of agricultural produce is not exempted and liable to tax, such commission agents shall be liable for registration if the aggregate turnover, in terms of Section 2(6) of the CGST/HGST Act, 2017, in a financial year exceeds 20 lakh rupees as per Section 22(1) of the said Act. 16. Advance ruling under Section 98 of the CGST/HGST Act, 2017 In the backdrop of above discussions and findings the advance ruling on the questions is pronounced as under :- Whether commission agent, providing services in relation to sale or purchase of Agricultural produce, is liable to obtain registration and is liable for tax under reverse charge mechanism on services provided in sale of Raw Cotton vide Notification No. 121/ST-2, dated 14-11-2017 issued under Haryana Goods & Services Tax Act, 2017 read with corresponding Notification No. 43/2017, dated 14-11-2017 issued under Central Goods & Services Tax Act, 2017. Ruling As per the above discussions, a commission agent who is making supplies on behalf of such ....