TaxTMI 
TaxTMI 
2021 (10) TMI 326
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....or Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant intends to manufacture and supply hosiery goods such as Vests, Briefs, etc. The applicant further proposes to implement a scheme with the objective of incentivizing its sale of hosiery goods amongst the retailers whereby it would offer unconnected goods for sale at a discounted price to such retailers who have bought a certain unit of hosiery product from it as would be prescribed in its retail scheme circular. However, the retailers will be at liberty not to purchase the goods offered under the said....
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....er grinder, cooler, split air conditioner, etc (herein after referred to as, the said goods) would be offered for sale and the sale would be conducted vide a separate invoice with GST recovered from the retailer on reduced/ discounted price at the applicable rate. It is important to note that the retailers have the right to refuse and may choose not to buy the said goods. 2.2 The applicant, prior to the sale of the said goods to the retailers, would purchase the same from the open market against GST invoice and would make the necessary tax payment. The applicant post payment of the applicable GST as indicated in the invoice, also intends and seeks to avail credit of the same as per the provisions under section 16 of the CGST Act and the rules framed thereunder for discharging its output tax liability. However, section 17 (5) of the CGST Act, lists down various supplies on which credit of the input tax paid cannot be availed. More specifically, the apprehension for which advance ruling is being sought arises from a reading of sub-clause (h) of section 17(5) of the CGST Act, which reads as below: "(5) Notwithstanding anything contained in sub-section (1) of section 16 and....
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....ly'. The supply of the said goods would be subsequent to the supply of the hosiery goods to the retailers, as the criteria for being eligible to purchase the said goods can only be met post sale of the hosiery goods. Needless to say that supply of hosiery goods and said goods would be for 2 separate prices. 2.8 The applicant submits that under the GST framework, every form of supply is taxable unless specifically exempted. Section 7 of the CGST Act broadly defines supply to mean any form of transaction which is undertaken for a consideration. The applicant further submits that supply under GST can partake the character of a 'mixed supply' or 'composite supply'. It becomes very necessary to determine the nature of the supply since the taxability thereof is dependent on it. 2.9 The applicant submits that for any supply to qualify as a 'mixed supply' the parameters stipulated under Section 2(74) of the CGST Act has to be met. As extracted in the aforesaid paragraphs, the following important conditions can be culled out from the definition of 'mixed supply': • For any supply to qualify as a 'mixed supply' there has to be two or more individual supplies or combination....
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....mbia Asia Hospitals Pvt. Ltd, 2019 (20) GSTL 154 (AAR-GST) wherein the issue pertained to valuation of medicines, food, drinks and healthcare services. The Hon'ble AAR in this regard held that: "(b) In case where the same do not form a part of the composite supply but still are supplied for a single price, then they would constitute a mixed supply and the entire price received would be liable to be taxed at the highest rate applicable to the goods or service supplied as per Section 8 of the CGST Act, 2017... c) In case where supplies of medicines, food and drinks and healthcare services are not supplied for a single price and form separate and independent supplies, then such supplies are to be taxed separately at the rates applicable to such supply of goods or services. Here the valuations of the individual supplies are to be valued on the basis of the provisions of Section 15 of the CGST Act". 2.15 The applicant submits that in the present case, the supply of the hosiery goods and the supply of the said goods would be for different prices. The applicant would be raising separate invoices for the supply of the hosiery goods and the supply of the said goods. Not....
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.... Act provides that a registered person is entitled to take credit of any input tax charged to him on the supply of goods or services which are used or intended to be used in the course or furtherance of business. 2.20 The applicant submits that the critical condition which has to be met for availing the input tax credit is that the goods must be used in the course or furtherance of business. The applicant submits that Section 2(17) of the CGST Act defines the term 'business'. Relevant portion of the definition of the term 'business' is extracted hereunder: "(17) business includes - (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction..." 2.21 According to the applicant, the term 'business' has been defined in the widest possible manner so as to include any form of activity, trade or adventure whi....
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....lso draws attention to Section 17(5)(h) of the GST Act where credit of input tax has been restricted if the goods are written off, destroyed, stolen or given as gift. The applicant submits that it has an apprehension that input tax credit on the said goods may be denied to it on the basis that the same is being given as 'gift'. However, the semantics of the retail scheme circular would evidence that the same would not be given as a 'gift' and therefore restriction envisaged under Section 17(5)(h) would be inapplicable in the present case. 2.25 The applicant submits that the CGST Act does not define the term 'gift' and therefore reference has to be placed on the definition of the term 'gift' occurring under other statutes. Section 2(xii) of the Gift Tax Act, 1958 ("Gift Tax Act") defines the term 'gift' as "transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section". 2.26 The applicant submits that a particular thing would qualify as 'gift' if the same is given volunta....
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....qualify as 'gift' and consequentially will not be hit by the restriction under Section 17(5)(h) of the CGST Act. 3. Submission of the Revenue 3.1 The concerned officer from the revenue has expressed her agreement with the interpretation of law as presented by applicant with respect to the issues on which advance ruling is sought for. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the Revenue. 4.2 The instant application is made in respect of a sales promotion scheme to be floated by the applicant where various items like gold coins, refrigerators, coolers, split air conditioner, etc. would be offered at a reduced/ discounted price by the applicant to his retailers who will purchase a specified units of hosiery goods. Separate invoices would be issued for supply of hosiery goods and supply of goods offered under promotional scheme for different prices. The issue involved in the instant case is twofold: (i) determination of n....
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.... hosiery goods and goods under promotional scheme are separate supply and tax on the supply shall be levied at the rate of each such item as notified by the Government. 4.8 The next question raised by the applicant pertains to admissibility of input tax credit on the items intended to be supplied by the applicant at a nominal rate under promotional scheme. Sections 16 of the GST Act deals with 'eligibility and conditions for taking input tax credit' which entitles a registered person to take credit of input tax charged on any supply of goods or services or both to him which are used on intended to be used in the course or furtherance of his business. In this regard, we accept the submission of the applicant that the retail scheme circular which is proposed to be floated by the applicant is aimed and intended to boost the sale of its hosiery goods. So, the provision of providing said goods under the retail scheme circular would undoubtedly qualify as an activity undertaken in the course or furtherance of business. 4.9 On the other hand, section 17 of the GST Act deals with 'apportionment of credit and blocked credits'. Sub-section (5) of section 17 begins with a non obstante c....