TaxTMI 
TaxTMI 
2020 (11) TMI 72
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....ot Attended 3. 11-7-2019 21-8-2019 Not Attended 4. 3-9-2019 15-10-2019 Not Attended 5. 13-2-2020 (final) 16-3-2020 Attended 3. Sri D. Balaji, Chartered Accountant and authorized representative of the firm (hereinafter referred to as 'A.R.') has appeared on earlier occasion and finally on 16-3-2020 for arguing the case. Finally, the appeal was heard by the Appellate Authority. Statement of facts :- 4. The appellant-M/s. Sri Kanaka Durga Rice and Flour Mill, Ravivalasa is an assessee on the rolls of the Assistant Commissioner (ST), M.G. Road East Circle, Vizianagaram Division, and doing the business of Paddy, Rice and by-products. 5. The assessing authority recorded in his order that on scrutiny of appellant returns and after obtaining certain information from Civil Supplies Department, he has opined that dealer need to be assessed under Section 74 of CGST/APGST Act, 2017, and passed orders accordingly after issuing a show cause notice. The AA further recorded that the appellant being a rice miller has received certain quantity of paddy from the civil supplies corporation and in turn milled the paddy so received after suc....
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....ned underdeclared tax of Rs. 1004326/- under CGST & APGST Acts, 2017, and passed orders dated 10-1-2019. 10. Aggrieved by the above orders passed by the assessing authority, the appellant has preferred the present appeal and disputed the levy of tax of Rs. 39,788/-. Grounds of appeal :- 11. The grounds of appeal filed by appellant in the appeal are extracted hereunder : (1) The assessment order No. 3, dated 10-1-2019 passed by the Assistant Commissioner (ST), M.G. Road, East Circle, Vizianagaram District is contrary to the law and the facts of the case is so far as it is against the Appellant. (2) At the outset, the assessment order having been given without invoking any specific provision of the act is contrary to the legal position and for this ground alone the assessment order request to be set-aside. (3) Without prejudice to the above, the assessing officer's action is illegal and arbitrary and is against the spirit and letter of the GST Act for several reasons including requirement of pre-payment of tax for which no provision is there under GST Law, no basis fo....
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....rejudice to the above, the learning Assessing officer failed to invoke any specific provision of the APSGST or CGST Act or rules to substantiate the surmises/Logic/estimate and therefore, the assessment order should be treated as not in accordance with law. (11) That the levy of tax on CMR charges again time of supply of service as service is yet to complete as per agreement. 12. For these and any other grounds to be urged at the time of hearing your appellant prays for the deletion of the above mentioned additions. 13. The appellant craves leave to add, amend, alter or delete any of the grounds. Discussion : 14. Perused the grounds of appeal vis-a-vis the impugned orders passed by the assessing authority i.e. Assistant Commissioner (ST), M.G. Road East Circle, Vizianagaram Division. 15. At the time of hearing, the A.R. has appeared and reiterated the contentions set-forth in the grounds of appeal. The appellant basically attempted to point out that the AA has not invoked any specific provisions of Act, hence orders are not in tune with the legal position. The appellant further demanded that if the department considers the val....
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....nt. Moreover, the appellant himself admitted that in addition to the amount of Rs. 15/- received by them as CMR charges, Government also compensated them by allowing to retain the by-products of broken rice, bran, husk to meet the various cost of milling activity, because the amount of Rs. 15/- per quintal will not be sufficient to meet such cost under any circumstances. This fact itself point towards a conclusion that the value of retaining goods by the miller shall nevertheless be considered as part of the value of supply with reference to the CMR job work service effected by the appellant like millers. 21. The appellant's point of objection that the AA has not invoked any specific provisions, is also against the findings recorded, because the AA has clearly recorded that he has relied on Section 15 of CGST/APGST Act, 2017 and also invoked Section 74 of CGST/APGST Act, 2017, for assessing the dealer, hence this particular contention of the appellant is rejected as not sustainable. Analysis of value of supply : " 'Customs milling Rice' is an arrangement where the Government (through its Civil Supplies Corporation) gets the Paddy milled into Rice. Thus, it is an....
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....sp; From the above definition, the key characteristics of consideration are as under (a) Consideration includes all the amounts received by the supplier in response to or in relation to or for inducement of the supply (b) Consideration could be in money or otherwise (i.e., Which is not a money or has a value.) (c) Consideration mean what is received by supplier, (d) Consideration need not be paid by recipient alone, the same can be paid by others/third party as well. (9) Therefore from the above definition of 'consideration' in the present Case is not only that portion that is received in cash i.e., 15/- per quintal but also that what is received by the rice miller in the form kind i.e., the residues left in the course of milling the rice Viz., broken rice, bran and Husk. (10) Determination of transaction value : As per section 15 of CGST/SGST Acts, "The value of a supply of goods or services or both shall be the transaction val....
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....alent of the shortfall in the rice that the rice miller is obliged to purchase in the open market and make good (15) The sum total of the above shall be the consideration for the customs Milling and the same is taxable at the rate of 5% Taxability or otherwise of Broken rice and Husk (16) As per the tariff under GST, the commodities Rice, Broken rice and Husk are exempt and bran is taxable One. Now the issue to consideration is Whether the broken rice, husk, which are exempt commodities will form part of the valuation as described Above? (17) To resolve the above it is pertinent to distinguish the 'Supply' and 'Consideration' supply is what is provided by the supplier and consideration is what is provided by the supplier and consideration is what he get in return. In case of cash transactions, usually, supply will be either goods or services whereas consideration will be in the form of cash. However in case of non-cash transactions both supply and consideration could be goods or services. Such a cases are normally termed as 'Exchange' or 'barter'. In such a case what is supp....
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....n shall raise a 'Deliver challan' for the quantities of paddy supplied. (24) Upon milling the rice, there emerges (a) Rice, (b) Broken Rice, (3) Bran and (4) Husk. All these are the property of Civil Supplies Corporation. Out of them the rice is being returned to the corporation, hence rice miller will raise another delivery challan for delivering the rice to the corporation. The other three commodities which are the property of the corporation are given away to the rice Miller. Out of the above broken rice and Husk are exempt commodities. To these extents the corporation shall raise a 'Bill of supply' Now bran is a taxable commodity, hence the corporation shall raise a 'Tax invoice' Levying tax @ 5%. This tax amount can be availed by the rice Miller as ITC. Compliances by Rice Miller : (25) The rice miller is rendering the service of customs milling which is taxable service. Hence upon completion of the said service the rice miller shall raise a tax invoice as per the provisions of sec. 31. The valuation for the supply shall be determined as per the discussion above and the rate of tax is 5%. (26) In case the rice m....