TaxTMI 
TaxTMI 
2020 (6) TMI 703
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....d 24.12.2018. Brief Facts of the Case A. M/s. Ordnance Factory, Bhandara (hereinafter referred to as 'Appellant' or OFBa interchangeably) having its corporate head office at, Jawahar Nagar, Bhandara, Maharashtra - 441906 is a unit of Ordnance Factories Board (OFB) functioning under the Department of Defence Production and Supply of Ministry of Defence, Government of India. There are 41 Ordnance factories in India in total, each engaged in different activities like production of finished products and their parts relating to arms, ammunitions, explosives, military clothing, etc. Established in the year 1960, the main business of the Appellant is to manufacture propellants and commercial explosives for use by sister factories for production of finished products like arms and ammunitions, which are ultimately supplied to Indian defence and military forces. Thus, the Appellant acts as a feeder factory for goods such as explosives and propellants for its sister Ordnance Factories that use such goods for production of finished goods. However, some of the manufactured goods are also directly supplied to depots and units of defence and military forces, as per requirement. The Appellan....
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....tour. Room charges are recovered from such guests for their stay on per day basis that are different for such different guest houses. G. The factory estate is huge and some portion of it has been let out on leasehold basis for commercial purposes like daily needs shops, banks, etc. Our organisation collects lease rentals from the tenants of such let out immovable property. H. Other ailied establishments like local accounts office & SQAE arc also functioning for the factory & within the factory. These organisations though a separate entity, they are units of the Central Government and function for OFBa. Local accounts office provides services related to accounting of transactions of OFBa. Payment of bills of OFBa etc. to OFBa & SQAE provides service related to quality control & checking of products of OFBa. The cost of salary & other expenses related to such allied establishments is included in the total cost of manufacturing of final products of OFBa &. thus, forms part of the value of taxable supply. Employees of such establishments are also provided residential quarter for accommodation and monthly license fees is collected from them in respect of such accommodation. The em....
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....ed by the hospital maintained by our organisation and used for treatment of factory employees and their dependents. Expenditure on maintenance, upkeep and other activities relating to such hospital. d) Expenditure related to maintenance and upkeep of guest houses maintained by organisation. e) Expenditure related to purchase of LPG cylinders used within industrial canteen. 3) Whether the exemption to a 'defence formation' for preparation and generation of E-way bills is applicable to Ordnance factories & other Central Government & public sector Undertakings (PSU's) that function under the Ministry of Defencc, Government of India? 4) Whether exemption on payment of GST on transport of 'military or defence equipment through a goods transport agency applicable to goods transported by our organisation? 5) Whether Input Tax Credit is to be reversed on finished goods that are destroyed during testing? 6) Whether proportionate Input Tax Credit has to be reversed in cases where lesser payment is made to the supplier due to deduction on account of liquidated damages from supplier's dues? 7) Being a part of the Ministry of Defence, Government of India, whethe....
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....red from residential quarters of employees. All the above matters pertain to certain notifications that provide exemptions from payment of GST to "Central Government" on transactions specified in such notifications. The ruling has not gone in favor of Ordnance Factory Bhandara in respect of all the matters raised from Sr. nos. a) to h) above except Sr. nos. c) & h). So, this appeal is against all Sr. nos. from a) to h) except Sr. nos. c) & h). 2. The reason of such ruling not being pronounced in favor of Ordnance Factory Bhandara for the aforementioned matters is that the AAR, Maharashtra has failed to recognize Ordnance Factory Bhandara as "Central Government". This failure is despite the fact that it was clearly mentioned in the application to AAR, Maharashtra, that Ordnance Factory Bhandara is "Central Government" on the following grounds: - "As per section 2(53) of the CGST Act, 2017, 'Government' means the Central Government. As per clause (23) of section 3 of the General Clauses Act, 1897 the 'Government' includes both the Central Government and any State Government. As per clause (8) of section 3 of the said Act, the 'Central Government', in relation to any....
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....t are ultimately supplied to Indian defence and military forces. Thus, Ordnance Factory Bhandara majorly acts as a feeder factory for goods such as explosives and propellants for its sister Ordnance Factories that use such goods for production of finished goods. 5. Going by the industrial nature of Ordnance Factory Bhandara & having an apex body in the Ordnance Factory Board, the legal opinion of the Department was that Ordnance Factory Bhandara cannot be treated as "Government" defined under section 2(53) of the CGST Act, 2017. Such opinion of the Department was accepted by the AAR, Maharashtra & it ruled that Ordnance Factory Bhandara cannot be treated as "Government" since Ordnance Factory Bhandara is not created by the constitution of India as a legislative, executive or judicial authority of the country. 6. It seems that the AAR, Maharashtra has not properly analyzed the meaning of "Government". It has contended that Ordnance Factory Bhandara is not "Government" since it is not created by Constitution of India as a "legislative, executive or judicial authority" of the country. However, AAR, Maharashtra did not take cognizance of the fact that the Constitution of India ne....
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....ed is that whether Ordnance Factory Bhandara falls into the definition of "Central Government" as per the aforementioned clause (8) of section 3 of the General Clauses Act, 1897 read with Article 53 & Article 77 of the Constitution of India. "As per clause (8) of section 3 of the General Clauses Act, 1897, the 'Central Government', in relation to anything done or to be done after the commencement of the Constitution, means the President. As per Article 53 of the Constitution, the executive power of the Union shall be vested in the President and shall be exercised by him either directly or indirectly through officer's subordinate to him in accordance with the Constitution. Further, in terms of Article 77 of the Constitution, all executive actions of the Government of India shall be expressed to be taken in the name of the President. Therefore, the Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President." 10. Thus, from a joint reading of all the above, it becomes quite obvious that "Central Government" is one where the President exercises the exe....
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.... it is "Central Government" itself since as explained above, it satisfies the conditions of being called "Central Government" as per the aforementioned clause (8) of section 3 of the General Clauses Act, 1897 read with Article 53 & Article 77 oi the Constitution of India. 13. It is pertinent to mention here that the order-in-appeal did not counter such definition & explanation of "Central Government" in detail whereas similar proofs that Ordnance Factory Bhandara is a "Central Government" were provided to AAR, Maharashtra during hearing proceedings. 14. Kindly also take note of the fact that the AAR, Maharashtra during hearing proceedings had orally agreed to on the basis of the facts of the case that Ordnance Factory Bhandara is "Central Government". However, it ruled to the contrary in its final order. 15. Also, AAR, Maharashtra should have clearly spelt out the status of Ordnance Factory Bhandara in its order, that is, if AAR, Maharashtra ruled that Ordnance Factory Bhandara is not "Government", then what should be the status of Ordnance Factory Bhandara as AAR, Maharashtra should have mentioned in its order which was not so done. 16. It is worth mentioning here that....
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.... India, whether our organisation Ordnance Factory Bhandara is liable to pay GST on the following supply of services: - a) Liquidated damages deducted from the payments to be made to in case of delayed delivery of goods or services: - Ordnance Factory Bhandara deducts liquidated damages (L.D) from the payments to be made to its suppliers in case of delayed delivery of goods or services. As per para 5(e) of Schedule Il to the CGST Act, 2017, "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" is an activity that shall be treated as a supply of service. However, Sr. No. 62 of the exemption list on supply of services as per notification no. 12/2017- Central tax (Rate)(enclosed herewith) specifies that, "Services provided by the Central Government, State Government, Union territory or local authority by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Central Government, State Government, Union territory or local authority under such contract" shall attract NIL rate of tax. The AAR, Maharashtra had ruled that the said exemp....
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....actory premises that serves food and beverages to employees of the factory. Neither is alcoholic liquor served in the industrial canteen nor is the industrial canteen air conditioned. Nominal charges for such food and beverages are recovered from. the employees on no profit basis in order to cover the day-to-day expenditure of the canteen. Such industrial canteen is run by the factory itself and no outdoor caterer is involved in providing services related to supply of food and beverages. Thus, such supply of food and beverages by the factory to factory employees inside the industrial canteen falls within the category of 'services' as per the aforementioned clause 6 of Schedule II to the CGST Act, 2017. However, in terms of the aforementioned Sr. No. 6 of the exemption list on supply of services as per notification no. 12/2017- Central Tax (Rate), supply of services by the Central Government to non-business entities attract 'NIL' rate of tax. Thus, since such supply of food and beverages is done to factory employees that are non-business entities, the charges recovered by the factory from such employees for such supply attracts 'NIL' rate of tax since Ordnance Factory Bhandara is "C....
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....ry Bhandara) is "Central Government" and the recipient of services(factory employees) are non-business entities. The AAR, Maharashtra had ruled that the said exemption is not applicable to Ordnance Factory Bhandara since it is not "Government". g) Conducting exams for various vacancies in the factory: For conducting examinations to fill up various staff vacancies in Ordnance Factory Bhandara, it collects fees from the candidates who wish to appear in such examinations. So, keeping in view the above discussed Sr. No. 6 of the exemption list on supply of services as per notification no. 12/2017- Central tax (Rate), such services of conducting examinations provided by Ordnance Factory Bhandara attract 'NIL' rate of tax since the provider of service (Ordnance Factory Bhandara) is "Central Government" and the recipient of services(candidates) are nonbusiness entities. The AAR, Maharashtra had ruled that the said exemption is not applicable to Ordnance Factory Bhandara since it is not "Government". h) Rent recovered from residential quarters of employees: No appeal is preferred against the ruling prescribed in sub-question h) of Question No. 1. 20. ....
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....ST Act, 2017 so as to entitle Ordnance Factory Bhandara to avail Input Tax of the said goods/services. It is worthwhile to note here that Hon. Finance Minister of India stated at paragraph 5(b) of the Statement of Objects & Reasons while introducing the Central Goods & Services Tax ("CGST") Bill, 2017 in the Parliament as under: - "5. The Central Goods and Services Tax Bill, 2017, inter alia, provides for the following, namely: - (b) to broad base the input tax credit by making it available in respect of taxes paid on any supply of goods or services or both used or intended to be used in the course or furtherance of business." Hence a clear intent to broad base the input tax credit is evident from the above. Also, the term "used or intended to be used in the course or furtherance of business" has been used to expand the scope of inputs & input services to those activities that have some direct or indirect nexus to business of the supplier. 23. So, it requested to the Hon. Appellate Authority for Advance Ruling to decide upon the admissibility of Input Tax Credit in relation to the following services keeping in view the aforementioned intention of the Hon. Fi....
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....is-a-vis erstwhile CENVAT Credit Rules where admissibility of CENVAT Credit was restricted to input services used directly or indirectly, in or in relation to manufacture of final product. a) Maintenance of garden inside the factory premises: - Here 'factory premises' means plant area where manufacturing activity is carried out and administrative building. The services of maintenance & upkeep of gardens that are located within the factory premises should be considered to be an "input service" as per section 2(60) of the CGST Act, 2017 and should also be considered to be "used or intended to be used in the course or furtherance of business" as per section 16(1) of the CGST Act, 2017 and Input Tax Credit should be available in respect of expenditure done on such services on the following counts:- i) Gardening is essential & mandated by Maharashtra Pollution Control Board to maintain quality of ambient air & prevent air& water pollution and also a condition precedent as laid down by the said Board, without which Ordnance Factory Bhandara cannot resort to its business activity of manufacturing. ii) Garden creates better atmosphere and environment which inc....
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....diture in or in relation to manufacture. In Commissioner of Central Excise, Delhi III, Suzuki Motor Cycle India Private Limited {2017 (47) STR 85 (Tri-Chan) = 2016 (9) TMI 576 - CESTAT CHANDIGARH, it was held by the Hon. Tribunal that the assessee is entitled to avail the credit of gardening service. All the aforementioned arguments and case laws were presented before the AAR, Maharashtra. Even the Department agreed to the admissibility of such Input Tax Credit on maintenance of garden inside the factory premises in its legal submission to AAR, Maharashtra. However, AAR, Maharashtra ruled that "maintenance of garden is not a supply that can be considered as a supply used or intended to be used in the course of furtherance of business of the applicant which is to manufacture Propellants and Explosives. Hence the applicant is not eligible to avail ITC of the tax paid by them on the same. The services availed in relation to plantation and gardening within the plant area will not qualify for Input Tax Credit. {n an appeal filed by the Commissioner of Commercial Taxes and GST, Odisha against an order of the AAR, Odisha, the Hon. AAAR, Odisha held that availing input tax credit for....
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....ganisations market area, places for worship of God, gardens, parks, playgrounds, swimming pool, footpaths, street lightings, factory school for children of employees, hall for recreational activities: - Services like maintenance, upkeep, repair, providing security, garbage collection, sewage treatment, civil construction, sweeping & cleaning etc. are procured in relation to the aforementioned establishments. The specific transactions in respect of which ruling on entitlement of input tax credit is required is specified in the enclosed "Annexure A". We wish to submit that all such services are used by the employees of the factory. The Ordnance Factory Board decided to develop such residential facilities within the factory estate since the factory is located at a remote area and employees from different parts of the country are recruited to work over here in Ordnance Factory Bhandara. The residential colony is an l industrial township' and the appellant is responsible to provide all types of municipal services in the colony. If the employees are not provided a proper residential colony with all the aforementioned facilities and establishments, there would be no availability of pro....
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....ntly, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding, etc., necessarily had to be considered as 'input services' falling within the ambit of Rule 2(1) of the CENVAT Rules, 2004." In the case of MANGALAM CEMENT LTD VERSUS COMMISSIONER OF C. EX. & S.T., JAIPUR-I = 2015 (10) TMI 2524 - CESTAT NEW DELHI, the Hon. Delhi bench of Tribunal held that the residential colony was constructed adjacent to the factory because of the reason that the factory manufacturing cement is located at a place which is away from the city. Unless the residential colony is constructed near the factory, the appellant will not be in a position to get the proper/adequate manpower for running its plant activities and thus set aside the order passed by the Id. Commissioner (Appeals) of denying CENVAT credit of service tax taken by the appellant on maintenance and repair work of their residential colony. In the case of CCE Meerut Vs. M/s. Bajaj Hindustan Ltd. = 2015 (9) TMI 1216 - CESTAT NEW DELHI, the dispute was in relation to allowance of CENVAT Credit of Service....
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....uch shops should be admissible as such expenditure is directly related to the business of renting of immovable property unless otherwise blocked under any other provisions of the CGST Act, 2017. (iii) Inter-connected roads between various establishments and facto premises: - The specific transactions in respect of which ruling on entitlement of input tax credit is required is specified in the enclosed "Annexure B". In general, services related to construction, repair and maintenance of such roads is procured. Roads connect the various establishments within the factory premises; that is factory where manufacturing activity is done and administration building with various other establishments within the factory estate like residential quarters, market area and other establishments mentioned above. Thus, the Input Tax Credit related to expenses mentioned in "Annexure B" in relation to such interconnected roads should be admissible on the following grounds: a) The road ranging from the main entrance gate from where the factory estate begins up to the factory premises is used for inward and outward transportation of raw materials & finished goods and is thus used in the c....
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....redit of service tax paid on jungle cutting services to keep environment, factory and finished product bacteria free are to be allowed as they have nexus with business activity of Appellant. All the aforementioned arguments and case laws were presented before the AAR, Maharashtra. However, the AAR, Maharashtra ruled that "the activities listed by the applicant are carried out outside the factory premises. These activities at best can be termed as welfare or social activities and they are not carried out in furtherance of the business and have no nexus to their manufacturing activity. Since these activities are not used or intended to be used by the applicant in furtherance of business, ITC on the same are not available to them." We wish to appeal against such ruling of AAR, Maharashtra based on the aforementioned arguments and case laws and contend that availment of Input Tax Credit on maintenance and upkeep activities relating to gardens, parks, playground, factory school for children of employees, hall for recreational activities, residential quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the fac....
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....ilable to applicant under sub-section (2) of Section 17 of the CGST Act, 2017 in respect of services and goods procured for maintenance of hospitals and pharmacy outlet as such services, being nil rated, fall under exempt supplies." Kindly also note that as per section 9 of the CGST Amendment Act, 2018, that is in force from 01/02/2019, an amendment in section 17(5) (b) of the principal CGST Act, 2017 has been brought about where input tax credit shall not be available in respect of supply of health services except where the same is obligatory for an employer to provide to its employees under any law for the time being in force. It is submitted that as per Ordnance Factory Medical Regulations, it is mandatory for Ordnance Factories to provide occupational health services through Factory Hospital. Thus, as per the amended section 17(5) (b) of the principal CGST Act, 2017, Input Tax Credit in respect of medicines purchased in factory hospital and other inputs and input services used in factory hospital should be allowed since such inputs and input services are used in respect of supply of health services to employees and their families that are mandatory to be provided under....
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....mbai)] = 2015 (10) TMI 1540 - CESTAT MUMBAI, it was held that security service provided to the guest house in the factory is admissible input service since guest house is used for the stay of employees and auditors which has direct nexus with factory which produces excisable goods therefore CENVAT credit is admissible to the appellant. In the case of L'Oréal India Pvt. Ltd. Vs. Commissioner of C. Ex., Pune-l [2011 (22) S.T.R. 89 (Tri.- Mumbai)] = 2010 (11) TMI 143 - CESTAT, MUMBAI, it was held that the appellant is eligible for credit of guest house maintenance services since such services have nexus or integral connection with the business of manufacturing of the final product. In the case of Commissioner of C. Ex., Visakhapatnam Vs. Hindustan Zinc Ltd. [2009 (16) S.T.R. 704 (Tri. - Bang.)] = 2009 (4) TMI 129 - CESTAT, BANGALORE, it was held that Guest House is used for businessmen during visit to the company in connection with the business. It is indeed related to business activity. The appellants are rightly entitled for credit. All the aforementioned arguments and case laws were presented before the AAR, Maharashtra. However, the AAR, Maharashtra ruled that -....
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....oods or services or both is obligatory for an employer to provide to its employees under any law for the time being in force. As per section 46 of the Factories Act, 1948, the State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided 2nd maintained by the occupier for the use of the workers. It is submitted that more than 2500 persons have been employed by Ordnance Factory Bhandara and thus the aforementioned provision relating to maintenance of canteen is obligatory for Ordnance Factory Bhandara to provide to its employees under the Factories Act, 1948. So, an industrial canteen has been provided by Ordnance Factory Bhandara for its employees within the factory where the employees have food and beverages by paying a nominal amount of money on no-profit-no-loss basis. Also, as per section 16(1) of the CGST Act, 2017, "Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to h....
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....f service as per clause 5(e) of Schedule II to the CGST Act, 2017 on which the Ordnance Factory Bhandara will have to discharge GSI. 27. It also ruled that "ultimately Ordnance Factory Bhandara would be paying a lesser amount to their suppliers against supply of goods received, which would result in lesser payment being made by the supplier towards GST. Hence Ordnance Factory Bhandara will be eligible to take ITC proportionally equal payment made to such suppliers and is therefore required to reverse ITC accordingly." 28. We find that both the contentions and rulings of AAR, Maharashtra are factually and legally incorrect. Firstly, AAR, Maharashtra stated in its ruling that Ordnance Factory Bhandara shall have to pay GST on Liquidated Damages deducted from the payments to its suppliers. However, it is once again re-iterated that Ordnance Factory Bhandara is "Government" and hence it is eligible to claim exemption in respect of payment of GST to 'Central Government" on services provided by it by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Central Government as stated in aforementioned sub-....
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....ier by the name of "K. P Instruments" vide Tax Invoice no. 57 dated 20/12/2017 of the supplier. The taxable amount of the Tax Invoice was Rs. 4,69,320/-, CGST & SGST amount levied were Rs. 42,239/- each and thus the total invoice amount was Rs. 5,53,798/-. Due to non-fulfillment of certain contractual conditions, Liquidated Damages @ 10% of the total invoice amount were deducted while making payment to the supplier in respect of the said invoice. Thus, 10% of Rs. 5,53,798/-, that is, Rs. 55,380/- were calculated as Liquidated Damages to be deducted from supplier's payment. However, while passing the accounting entry in the books of Ordnance Factory Bhandara for the transaction of paying the supplier, full amounts of Rs. 4,69,320/- & Rs. 42,239/- were recorded as taxable amount & CGST/SGST amounts respective!y. Rs. 55,380/- was shown as a deduction in respect of Liquidated Damages from the payment to be made to the supplier. Enclosed herewith is a copy of voucher for such transaction. The code head 01/806/01 is used for recording the taxable amount, CGST amount and SGST amount and the code head 01/802/01 is used for recording the L.D amount in the enclosed copy of the transact....
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....its supplier due to such short delivery goods/services, then in such cases it can be said that lesser payment has been made to the supplier in respect of supply of goods/services but not in cases where L.D is deducted from payment of supplier due to delay in supply of goods/services. So, it requested to kindly look into this matter with generosity otherwise it may lead to loss of genuine Input Tax Credit to Ordnance Factory Bhandara. 29. Appeal against ruling pronounced for Question No. 7: -The Question No.7 that was asked for in Form ARA-Ol is as follows: - Being a part of the Ministry of Defence, Government of India, whether the following notifications are applicable to our rganization and what shall be the impact of such notifications: - a) Notification No. 2/2018- Central Tax (Rate), in relation to services by an arbitrator or an advocate to our organisation, b) Notification No. 3/2018- Central Tax (Rate), in relation to services supplied by our organisation by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017. c) Notification No. 36/2017 - Central Tax (Rate), in relation to payment....
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.... under section 2(53) of the CGST Act, 2017. Hence, they are not liable to pay GST. The Indian Ordnance Factories is an industrial organization, functioning under the Department of Defence Production of Ministry of Defence, Government of India. It is engaged in research, development, production, testing, marketing and logistics of a comprehensive product range in the areas of air, land and sea systems. This is the Apex board having industrial status functioning under the control of Ministry of defence. However, the Govt. of India is a union Govt. created by the constitution of India as the legisladive, executive and judicial authority of the union of India of states and union territories of the constitutionally democratic republic. On the above facts, though ordnance factory is functioning under the Ministry of defence, Govt. of India, the organization shall not be treated as "Government" defined under section 2(53) of the CGST Act, 2017, since the organization is having Apex Body and industrial status. Hence, the contention of appellant that their organization is 'Government" is not legal and correct. As per Sr. No. 62 (heading 9991 or 9997) of Notification No. 12/2017-Cen....
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....stablish separately that the appellant's organization shall not be treated as Government. It is also noticed that, the appellant has not clarified the fact that whether they themself engage in supply of food and beverages at the canteen for their employees or they have engaged any contractor for the supply of food and beverage. They have also not clarified whether they are charging money from their employee for supply of such food and beverage in their industrial canteen. Hence in absence of such clarification, liability cannot be ascertained at this stage. However, as per the notification 11/2017-CT dated 28.06.2017 amended by notification No. 46/2017 dated 14.11.2017, the supply of food and beverages is covered under the category of catering services, which is taxable under GST regime. The taxability of GST on supply of food and beverages in the premises of industrial units/offices has also been confirmed by the Authority of Advance Ruling Chennai vide order No. 9/AAR/ 2018 dated 30.08.2018. Copy of same is enclosed for the ready reference. e. Community hall (Multipurpose Hall) provided on rental basis to employees of our organization. Submissi....
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....upkeep activities relating to gardens, parks, playground, factory school for children of employees, halt for recreational activities. residential quarter building of employees, roads footpaths, street lightings and other parts of the estate orea that are located outside the factory premises but within the factory estate. Submission by Department: As per the section 16 of the CGST Act, every registered person Shall be entitled to take credit of input tax charged on any supply of goods and services or both by him which are used or intended to be used in the course of furtherance of his business and said amount will be credited to the electronic credit ledger of the such person. However the appellant has received services from the service provider towards the maintenance and upkeep activities relating to gardens, parks, playground, Factory school for children of employees, hall for recreational activities residential Quarter buildings of employees, roads, footpaths, street lightings and other parts of estate area that are located outside the factory premises but within the factory estate have no nexus to the manufacturing activity undertaken by the appellant. The said activities....
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....of services. e. Expenditure related to purchase of LPG cylinders used within the industrial canteen. Legal Submission by Department: - As per the section 16 of the CGST Act, every registered person shall be entitled to take credit of input tax charged on any supply of goods and services or both by him which are used or intended to be used in the course of furtherance of his business and said amount will be credited to the electronic credit ledger of the such person. However, if the appellant has purchased LPG cylinders for using in their office for the preparation of foods and beverages for their employee. The said activities are nether relating to business nor relating to manufacture of final products and its supply. The said activities may be welfare activity undertaken while carrying on the business, but to qualify as input service the activity must have nexus with the business of appellant. The expression "in course or furtherance of business" appearing in section 16(1) of GST Act refers to activities which are integrally related to the business activity and not welfare activity. Hence no ITC is available on purchase of LPG cylinder. 36. Question: -6) Whether pro....
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....017, which shall be covered under the definition of supply of services as defined CGST Act 2017 as supply of real estate services other than renting of residential dwellings and will be chargeable to tax under the GST regime. c. Being a part of the Ministry of Defence, Government of India, what is the impact of the Notification No. 36/2017-Central Tax (Rate), In relation to payment of tax on reverse charge mechanism on sate of used vehicles, seized and confiscated goods, old and used goods, waste and scrap to a GST registered person. Legal Submission by Department: - As per Notification No. 4/2017-Central Tax (Rate) dated 28th June 2017 as amended vide Notification No. 36/2017-Central Tax (Rate) dated 13th October,2017, the recipient of supply shall pay tax on reverse charge basis. Hence appellant is liable to pay GST on sale of used vehicles, seized and confiscated goods, old and used goods, waste and scrap to a GST registered person. It is further submitted that the Advance Ruling Authority, Mumbai vide order No. GST-ARA-79/2018-19/B-168 dated 24-12-2018 = 2019 (6) TMI 1236 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA already decided that the M/s. Ordnance Factory, Bha....
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....llant as well as jurisdictional officer. We have also perused the ruling pronounced by the Advance Ruling Authority, wherein the AAR inter alia observed that the Appellant cannot be construed as Central Government on the ground that the same had not been created by the Constitution of India as a legislative, executive or judicial authority of the country. 40. On perusal of the above, one of the moot issues, before us, is whether the Appellant, i.e. Ordnance Factory Bhandara, can be construed as "the Central Government" in light of the various legal provisions and documentary evidences, relied upon by the Appellant. 41. The Appellant challenged the aforesaid observation made by the Advance Ruling Authority by putting forth the following contentions: 42. As regards the advance ruling observation in as much as Ordnance Factory Bhandara is not "Government" since it is not created by Constitution of India as a "legislative, executive or judicial authority of the country, it was contended by the Appellant that AAR, Maharashtra did not take cognizance of the fact that the Constitution of India need not "create" the organisations intended for functioning of the country. They furth....
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.... Government" as per the aforementioned clause (8) of section 3 of the General Clauses Act, 1897 read with Article 53 & Article 77 of the Constitution of India. "As per clause (8) of section 3 of the General Clauses Act, 1897, the 'Central Government' shall, in relation to anything done or to be done after the commencement of the Constitution, means the President. As per Article 53 of the Constitution, the executive power of the Union shall be vested in the President and shall be exercised by him either directly or indirectly through officer's subordinate to him in accordance with the Constitution. Further, in terms of Article 77 of the Constitution, all executive actions of the Government of India shall be expressed to be taken in the name of the President. Therefore, the Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President." 45. The Appellant further accentuated that all the powers provided to Ordnance Factory Bhandara's officers and decisions taken in Ordnance Factory Bhandara are on behalf of the President of India. Even the recruitments i....
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....n salaries and wages, stores etc. are drawn from the Defence Services Estimates of the Union Budget, clearly showcase this fact that the Ministry of Defence has certified that Indian Ordnance Factories are integral part of the Government of India, which in other words means that Ordnance Factory Bhandara is "Government" for all practical purposes. 51. In this regard, we completely agree with the submissions and contention put forth by the Appellant, wherein they have claimed themselves as the Central Government, as it is evident that they are fulfilling all the conditions stipulated for the Central Government, provided under clause (8) of section 3 of the General Clauses Act, 1897 read with Article 53 & Article 77 of the Constitution of India. Since, the Appellant is functioning under the Department of the Defence Production, Ministry of Defence, Government of India, and all its activities including administrative, executive, etc. are carried out for and on behalf of the President of India, the facts which have been established by the various documents like the Appointment letter of the Group A Gazetted Officer of the Ordnance Factory, OFB Procurement Manual. OFB Procurement Man....
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....certain contract conditions, it is observed that the aforementioned transactions/activities carried out by the Appellant would squarely get covered under the scope of Sr. No. 62 (heading 9991 or 9997) of Notification No. 12/2017-Central Tax(Rate) dated 28th June 2017, which stipulates that "Services provided by the Central Government, State Government, Union territory or local authority by way of tolerating nonperformance of a contract for which consideration in the form of fines or liquidated damages is payable to the Central Government, State Government, Union territory or local authority under such contract" shall attract NIL rate of tax. Since the Appellant, which has been established as 'Central Government' as described herein above, is supplying the services of tolerating the nonperformance of a contract against the Liquidated Damages and security deposit forfeited by the suppliers, which are covered under the aforementioned Sr. No. 62 of the Exemption Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 attracting Nil rate of GST. Hence, GST will not be applicable to the aforesaid transactions/activities carried out by the Appellant, as have been described under question I(....
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....t can be construed as Central Government and the activities carried out by the Appellant by way of the supply of foods or drinks in the canteen, located inside the factory premises shall be treated as supply of services in terms of clause 6(b) of the Schedule II to the CGST Act, 2017, it may adequately be inferred that the aforementioned activities described under question 1(d) of the Advance Ruling Application, i.e. supply of foods or drinks in the canteen, located inside the Factory premises, will get covered under the scope of activities described at Sr. No. 6 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017,and accordingly Wilf attract Nil rate of GST, as the said services are being provided by the Appellant to their employees, who are certainly non- business entities. 58. Now, we will examine question I(e) asked by the Appellant as to whether Community hall provided on rental basis to employees of the factory will attract GST or otherwise. In this regard, the Appellant has submitted as under: There is a community hall within the factory estate that islet to be used by the factory to its employees for their personal purposes like family gatherings, marriages, ....
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....t on supply of services as per notification no. 12/2017- Central tax(Rate), such services provided by Ordnance Factory Bhandara attract 'NIL' rate of tax since the provider of service (Ordnance Factory Bhandara) is "Central Government" and the recipient of services (factory employees) are non-business entities. The AAR, Maharashtra had ruled that the said exemption is not applicable to Ordnance Factory Bhandara since it is not "Government". 61. As regards the above question raised by the Appellant, we refer to the reasoning made in the above para 56 and conclude that the Appellant, being 'the Central Government' is providing services of transportation to the children of its employees, which are clearly non-business entities. Hence such services rendered by the Appellant will not be subject to GST in accordance with the provisions of Sr. No. 6 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017. 62. Now, we will examine question 1(g) asked by the Appellant as to whether Conducting exams for various vacancies in the factory will be subjected to GST. In this regard, the Appellant's submissions are as under: For conducting examinations to fill up various staff v....
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.... (d) Expenditure related to maintenance and upkeep of guest houses maintained by organisation. (e) Expenditure related to purchase of LPG cylinders used within industrial canteen. 66. The AAR, Maharashtra ruled that Input Tax Credit in respect of any of the above shall not be available to Ordnance Factory Bhandara except sub-question e), that is, expenditure related to purchase of LPG cylinders used within industrial canteen. 67. The explanation that AAR, Maharashtra gave for denying such credit was that the goods/services used in such activities are not used or intended to be used by Ordnance Factory Bhandara in furtherance of its business. 68. Input Tax Credit in relation to sub-question e), that is, expenditure related to purchase of LPG cylinders used within industrial canteen was allowed by AAR, Maharashtra on the pretext that the output supply of food and beverages to employees in industrial canteen is taxable. 69. The Appellant has challenged the above said ruling of AAR, Maharashtra on the following grounds: 70. The basic question that is being asked here is that whether the following goods/services received by the factory are covered under the de....
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....Y HIGH COURT, a Division Bench of the Hon. Bombay High Court held that the expression 'activities in relation to business' in the inclusive part of the definition of 'input service' further widens the scope of input service so as to cover all services used in the business of manufacturing the final products and that any service, used in relation to the business of manufacturing the final products, would be an eligible input service for availing CENVAT Credit. It was also held that the cost of any input service that forms part of value of final products would be eligible for CENVAT credit. 75. Thus, it can be construed to mean from such decision that where the input service used is integrally connected with the business of manufacturing the final product and the cost of that input service forms part of the cost of the final product, then credit of service tax paid on such input service would be allowable. 76. Therefore, applying the same logic, in the GST regime, the said following services can be said to be satisfying the twin necessities for availing Input Tax Credit of GST in respect of expenditure on the said services; that is "input services" and 'used or intended to be u....
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.... Commissioner of Central Excise, Belapur {2016 (42) STR 88 (Tri-Mumbai)} = 2015 (9) TMI 944 - CESTAT MUMBAI, it was held by the Hon. Tribunal that the credit on 'gardening expenses' is fully allowable as the same is required for maintaining the good atmosphere in the manufacturing area and also a condition precedent as laid down by the State Pollution Control Board, without which the appellant cannot resort to manufacturing Activity. 86. In HCL Technologies Ltd., Vs. Commissioner of Central Excise, Noida {2015 (4) STR 369 (Tri-Dei) = 2015 (8) TMI 595 - CESTAT NEW DELHI, it was held by the Hon. Tribunal that Garden Maintenance Services qualify as input services. 87. In Lifelong Meditech Ltd., Vs. Commissioner of Central Excise and Service Tax, Gurgaon II {2016 (44) STR 626 (Tri-Chan)} = 2016 (7) TMI 468 - CESTAT CHANDIGARH, it was held by the Hon. Tribunal that "horticulture services are directly related to the manufacturing activity by the appellant as without maintaining the garden, the appellant cannot run their factory. Therefore, I hold that the appellant is entitled to avail CENVAT Credit for horticulture services." 88. In M/s. Orient Bell Ltd., Vs. Commissioner of Ce....
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.... circumstances of the above cited Madras High Court case of M/s. Rane TRW Steering System Ltd. vs The Commissioner of Central Excise and Central Tax (2018) = 2018 (2) TMI 1745 - MADRAS HIGH COURT, wherein the Appellant had contended on the ground that the maintenance of the garden inside the factory premises is a mandatory condition imposed by the Tamil Nadu Pollution Control Board for the setting up and operation of the factory. In the present case also, it is mandated by the Maharashtra Pollution Control Board to maintain the garden in the factory premises of the Appellant, Further, the definition of the Input services provided under section 2(60) of the CGST Act, 2017 is comparatively wider than the earlier definition of input services, which were provided under Rule 2(l) of the erstwhile Cenvat Credit Rules, 2004, owing to the presence of the phrase "used or intended to be used in the course or furtherance of business" under the present GST Law. Further, the Department, in this case the respondent, has also not opposed to the admissibility of the ITC in respect of the input services used by the Appellant in the maintenance of the gardens inside the factory premises. 95. Henc....
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....Input Tax Credit: (i) Residential quarters of employees of Ordnance Factory Bhandara & allied organisations, market area, places for worship of God, gardens, parks, playgrounds, swimming pool, footpaths, street lightings, factory school for children of employees, hall for recreational activities: - Services like maintenance, upkeep, repair, providing security, garbage collection, sewage treatment, civil construction, sweeping & cleaning etc. are procured in relation to the aforementioned establishments. The specific transactions in respect of which ruling on entitlement of input tax credit is required is specified in the enclosed "Annexure A". We wish to submit that all such services are used by the employees of the factory. The Ordnance Factory Board decided to develop such residential facilities within the factory estate since the factory is located at a remote area and employees from different parts of the country are recruited to work over here in Ordnance Factory Bhandara. The residential colony is an 'industrial township' and the appellant is responsible to provide all types of municipal services in the colony. If the employees are not provided a proper residential colo....
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.... linked to its manufacturing activity could not therefore, be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding, etc., necessarily had to be considered as 'input services' falling within the ambit of Rule 2(1) of the CENVAT Rules, 2004." In the case of MANGALAM CEMENT LTD VERSUS COMMISSIONER OF C. EX. & S.T., JAIPUR-I, the Hon. Delhi = 2015 (10) TMI 2524 - CESTAT NEW DELHI bench of Tribunal held that the residential colony was constructed adjacent to the factory because of the reason that the factory manufacturing cement is located at a place which is away from the city. Unless the residential colony is constructed near the factory, the appellant will not be in a position to get the proper/adequate manpower for running its plant activities and thus set aside the order passed by the Id. Commissioner (Appeals) of denying CENVAT credit of service tax taken by the appellant on maintenance and repair work of their residential colony. In the case of CCE Meerut vs M/s. Bajaj Hindustan Ltd. = 2015 (9)....
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....commodation facility to its staffs in the residential colony maintained by them. Thus, the facts and circumstances of the above cited cases are different form the instant case, where the Appellant is charging some rent/consideration from their employees for providing accommodation facility in the residential colony maintained by it, which renders the said activity of the Appellant as supply of residential services, which is an exempt supply in itself in terms of the provisions made at Sr. 12 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017. Further, the education services provided by the factory school to the children of the employees, renting of the recreational halls to the employees for organizing some family functions against certain considerations are exempt supply as discussed while replying to the question 1 of the advance ruling application of the Appellant. Since, all the aforementioned supplies made by the Appellant are exempt supply, any inputs or input services viz. maintenance, upkeep, repair, providing security, garbage collection, sewage treatment, civil construction, sweeping & cleaning, etc., pertaining to the residential quarters of employees of Ord....
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....ters, hospital, guest houses, market area and all other establishments as mentioned above are also used for the purpose of business of Ordnance Factory Bhandara since as argued above all such establishments are there for the benefit of employees of the factory& thus such roads are used in the course of business of Ordnance Factory Bhandara. f) The cost of such services forms part of the cost of the final products and thus forms part of the value of taxable supply. 96.3 On perusal of the above submissions made by the Appellant, it is observed that the construction and maintenance of the roads in the factory estate is mandatory for the Appellant to carry out their business operation. Without the proper road, the transportation of inputs, capital goods, and the finished products of the Appellant will not be able to take place. Thus, as per section 16(1) of the CGST Act, 2017, the expenditures incurred on the construction and maintenance of the road from the factory's main gate to the factory premises where the manufacturing activities take place is eligible for ITC, since the same is incurred on the input services, which are used in the course or furtherance of business. ....
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.... and finished product bacteria free are to be allowed as they have nexus with business activity of Appellant. 96.4. After careful consideration of the above submissions and case law cited by the Appellant, it is opined that the Appellant is entitled to avail ITC in respect of expenditure incurred on the maintenance of such unused land in the factory estate, as the same is essential for keeping the factory surroundings bacteria free, and keeping the roads adjacent to such lands commutation worthy, which is important for smooth business operation of the Appellant. Thus, the said maintenance services like cutting of the wild grass and other vegetation are being used in the course or furtherance of business, hence these services may be construed as input services, accordingly are eligible for ITC. Now, let us examine the issue of admissibility of ITC, raised by the Appellant in question 2(c) of the advance ruling application, in respect of the various inputs like medicines and others mentioned in "Annexure D" , purchased by the factory for the hospital and expenditure on input services like maintenance, upkeep and other activities also mentioned in "Annexure D" relating to such h....
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.... issue, it was ruled by AAR, Maharashtra that the hospital/dispensary maintained by the applicant to its employees and their dependents is to be categorized as "clinical establishment" as defined at Sr. No. 2(s) of the Notification No. 12/2017-C.T. (Rate) dated 28.6.2017, and supply of health care service by such clinical establishment is exempted under Sr. No. 74 bearing heading 9993 of the Notification No. 12/2017- Central Tax(Rate) dated 28th June, 2017, hence ITC on such exempted supply of services is not available to applicant under sub-section (2) of Section 17 of the CGST Act, 2017 in respect of services and goods procured for maintenance of hospitals and pharmacy outlet as such services, being nil rated, fall under exempt supplies. 97. We have perused the aforesaid submissions made by the Appellant, wherein they have placed their emphasis on section 9 of the CGST Amendment Act, 2018, which is in effect from 01.02.2019, which provides that input tax credit shall not be available in respect of supply of health services except where the same is obligatory for an employer to provide to its employees under any law for the time being in force. The Appellant here has referred t....
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....nce, the ruling pronounced by the AAR in this regard is erroneous, and warrants to be set aside. 100. Now, let us examine the issue of admissibility of ITC, raised by the Appellant, in question 2(d) of the advance ruling application, wherein they had asked as to whether they were eligible to avail ITC in respect of input services pertaining to maintenance and upkeep of guest houses maintained by them. Here, it was held by AAR, Maharashtra that the Appellant were not entitled to avail the ITC in respect of the input services pertaining to the maintenance and upkeep of the Guest houses owned and controlled by the Appellant as the provisions of the guest house facility to the employees are not in the course or furtherance of business, and also the said services of the guest house facility were being consumed personally by the Appellant and its employees, therefore, ITC in respect of the inputs or input services related to the upkeep and maintenance of the guest houses are not available to the Appellant in terms of the provision of section 17(5)(g) of the CGST Act, 2017. The Appellant has challenged this ruling of AAR, and to support their contention, they have cited various case la....
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.....2017 as the Appellant, as discussed above, has been held to be the Central Government. Therefore, No ITC is available against the said exempt supply in terms of the provision of section 17(2) of the CGST Act, 2017. Therefore, the ITC in respect of the inputs and input services pertaining to the guest houses will not be available to the Appellant. 104. Now, let us examine the issue of admissibility of ITC, raised by the Appellant, in question 2(e) of the advance ruling application, wherein they had asked as to whether they were eligible to avail ITC in respect of the expenditure related to purchase of LPG cylinders used within industrial canteen. Here, it was ruled by the AAR, Maharashtra that since their canteen is providing services related to supply of food and beverages tc their employees and also charging consideration for the same, thereby rendering such services leviable to GST regime, therefore, ITC in respect of LPG cylinders being used to provide such taxable services related to supply of food and beverages to their employees are available to the Appellant. 105. However, the Appellant have contended that allowing the availment of ITC on the aforementioned grounds by....
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....t the Appellant's activities Of the supply of Food and beverages at the industrial canteen inside the factory premises would attract NIL rate of GST, that is the said supply was held to be exempt supply in terms of Sr. No. 6 of the Notification no. 12/2017- Central Tax-(Rate) dated 28.06.2017. Since the subject supply has been held to be exempt supply by the Appellant, the ITC in respect of the LPG cylinders used in the factory canteen of the Appellant will not be available in terms of section 17(2) of the CGST Act, 2017. 108. Now, let us examine the question 6 of the advance ruling application, wherein the Appellant has asked as to whether proportionate Input Tax Credit has to be reversed in cases where lesser payment is made to the supplier due to deduction on account of liquidated damages from supplier's dues. As regards this issue, the AAR Maharashtra firstly inter alia ruled that Ordnance Factory Bhandara shall have to pay GST on Liquidated Damages deducted from the payments to its suppliers. AAR further ruled that ultimately Ordnance Factory Bhandara would be paying a lesser amount to their suppliers against supply of goods received, which would result in lesser payment be....
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....s the lesser payment being made to the suppliers would result in lesser payment of GST by the concerned suppliers, it was submitted by the Appellant that the taxable value of goods/services does not change due to L.D deduction. They inter alia submitted that the supplier shall have to pay tax on the entire taxable amount and not just only on the amount after deduction of L.D. They have corroborated this contention with the copies of GSTR-2A of the Appellant, wherein the above mentioned two sample invoices are being reflected. They further submitted that no credit notes have been raised by the supplier in respect of these two invoices which means that even the supplier understands that the taxable amount does not decrease due to deduction of L.D; and that the supplier not intend to pay lesser amount to the GST Department by issuing credit notes in respect of deduction of L.D from such invoices. 111. On perusal of the submissions and documentary evidences put forth by the Appellant, it is amply revealed that deduction of Liquidation Damages from the dues of the suppliers on account of delayed delivery of goods or services has no bearing, whatsoever, on the actual taxable amount an....
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....s, waste and scrap to a GST registered person. The AAR, Maharashtra answered in the negative for all the three aforementioned sub-questions of question no. 7 of the application by contending that the notifications are not applicable to Ordnance Factory Bhandara since it is not "Government" 114. The Appellant has contended the aforementioned ruling of the AAR on the basis of facts and explanations given for Question No.l that Ordnance Factory Bhandara is indeed "Government" and hence all the three aforementioned notifications in Question No. 7 to the application should be applicable to Ordnance Factory Bhandara. 115. In this regard, we are of the opinion that since the Appellant has been held to be "the Central Government" as per the discussions and findings carried out herein above, hence all the three aforementioned notifications in Question No. 7 to the application should be applicable to Ordnance Factory Bhandara. 116. Now, before going into the operative part of the Order, it would be much providential to summarize the above discussions and findings in the tabular form, which is being inserted herein under: Questions asked by the Appellant Discussions and Find....
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....Amount of Security deposit forfeited of suppliers due to non-fulfilment of certain contract conditions. (d) Food and beverages supplied at industrial canteen inside the factory premises. (e) Community hall (Multipurpose Hall) provided on rental basis to employees of our organization. (f) School bus facility provided to children of the employees. (g) Conducting exams for various vacancies. Question: 2) Whether Input Tax Credit on expenditure on the goods and services consumed by our organisation in following activities shall be available: - (a) Maintenance of garden inside the factory premises. Findings in respect of Q. 2(a):- On perusal of the submissions made by the Appellant including the various judicial pronouncements cited by the Appellant, wherein it was categorically held by the courts that Cenvat Credit in respect of the input services used in the maintenance of the gardens in the factory premises is admissible, it is opined that ratio of these judicial pronouncements is clearly applicable in the instant subject matter as the facts and circumstances of the instant subject matter is similar to the facts and circumstances of the ab....
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....n exempt supply in itself in terms of the provisions made at Sr. 12 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017. Further, the education services provided by the factory school to the children of the employees, renting of the recreational halls to the employees for organizing some family functions against certain considerations (are exempt supply as discussed while replying to the question 1 of the advance ruling application of the Appellant. Since, all the aforementioned supplies made by the Appellant are exempt supply, any inputs or input services viz. maintenance, upkeep, repair, providing security, garbage collection, sewage treatment, civil construction, sweeping & cleaning, etc., pertaining to the residential quarters of employees of Ordnance Factory Bhandara & other allied organisations, market area, places for worship of God, gardens, parks, playgrounds, swimming pool, footpaths, street lightings, which are used inside the residential colony will not be available to the Appellant for ITC in accordance with the provision of Section 17(2) of the CGST Act, 2017. (c) Medicines purchased by the hospital maintained by our organisation and used for treatment of ....
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....ial canteen inside the factory premises would attract NIL rate of GST, that is the said supply was held to be exempt supply in terms of Sr. No. 6 of the Notification no. 12/2017- Central Tax-(Rate) dated 28.06.2017. Since the subject supply has been held to be exempt supply by the Appellant, the ITC in respect of the LPG cylinders used in the factory canteen of the Appellant will not be available in terms of section 17(2) of the CGST Act, 2017. Question: 6) Whether proportionate Input Tax Credit has to be reversed in cases where lesser payment is made to the supplier due to deduction on account of liquidated damages from supplier's dues. Findings in Q. 6: - On perusal of the submissions and documentary evidences put forth by the Appellant, it is amply revealed that deduction of Liquidation Damages from the dues of the suppliers on account of delayed delivery of goods or services has no bearing, whatsoever, on the actual taxable amount and GST leviable thereon mentioned in the tax invoices, as the transaction of L.D. is separate from the transaction of the receipt of the goods or services. It is manifest from the two separate accounting codes, maintained by the Appellant, o....
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....ling pronounced by the AAR, Maharashtra and pass the following order: ORDER For the reasons recorded in the body of the order, the questions against which the Appellant has preferred appeal against the ruling of the AAR, Maharashtra, are being answered as under: Question: 1) Being a part of the Ministry of Defence, Government of India, whether our organization Ordnance Factory Bhandara is liable to pay GST on the following supply of services: - a) Liquidated damages deducted from the payments to be made to suppliers in case of delayed delivery of goods or services. b) Amount of Security deposit forfeited of suppliers due to non-fulfillment of certain contract conditions. (d) Food and beverages supplied at industrial canteen inside the factory premises. (e) Community hall (Multipurpose Hall) provided on rental basis to employees of our organization. (f) School bus facility provided to children of the employees. (g) Conducting exams for various vacancies. Answer: The Appellant is not liable to pay GST in any of these abovementioned activities/transactions carried out by them. Question: 2) Whether Input Tax Cre....