TaxTMI 
TaxTMI 
2021 (10) TMI 799
X X X X Extracts X X X X
X X X X Extracts X X X X
....bject transaction under reverse charge mechanism in terms of entry no. 1 of Notification No. 10/2017-Integrated Tax (Rate) dated 28.06.2017? 3. In case it is held to be a supply of service and the applicant is liable to discharge GST under reverse charge mechanism, whether the said 'supply of service' is classifiable under entry no. 17 (i) of Notification No. 8/2017-lntegrated Tax (Rate) dated 28.06.2017 (as amended)? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by M/s. USV Private Limited, the applicant, are as under:- 2.1 The Applicant, is a healthcare company in India, registered under the GST regime and Novartis AG ('NAG') is a Switzerland based pharma company which owns rights of Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3 (36) of the General Clauses Act, 1897 as property of every description, except immovable property. 2.6 Also, the Courts in a plethora of cases have consistently treated 'intellectual property rights' as 'goods' under the erstwhile Value Added Tax (VAT) / Central Sales Tax (CST) laws. Some of the case law is as under • Lai Products vs Intelligence Officer, 2018 TIOL 2639 HC Kerala VAT • M/s. Merk KGAA Germany Vs The State of Maharashtra 2016-TIOL-02 Tribunal - Mum-VAT 2.7 Accordingly, Intellectual Property Rights' shall be treated as 'goods'. 2.8.1 Further, entry no. 17 (i) of Notification No. 8/2017-lntegrated Tax (Rate) dated 28.06.17, which provides for the IGST rates on services, is as follows- Sl.No. Chapter, Section of Heading Description of Service Rate (per cent.) Conditions 17 Heading 9973 (Leasing or rental services without operator). (i) Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods other than Information Technology software 12 --- 2.8.2 It is evident that this entry is covered under the main heading of 9973 - Heading (Leasing....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... transfer of Intellectual Property is a supply of goods or services) and temporary or permanent transfer of Intellectual Properly in respect of Information Technology software would attract 18% GST (irrespective of whether permanent transfer of Intellectual Property in respect of supply of Information Technology software is a supply of goods or services). This Amendment was proposed as a dispute/litigation avoidance measure. The Secretary stated that this Agenda item was discussed during the officers' meeting held on 9 November, 2017 in Guwahati and agreed upon. He suggested that the Council could also agree to this proposal. The Council agreed to the proposal." 2.10 This also brings out the intention of the Council of not considering the permanent transfer of IPR as a 'service' but as 'goods'. Thus, permanent transfer of Intellectual Property Rights' should be treated as 'supply of goods'. LIABILITY TO DISCHARGE GST UNDER REVERSE CHARGE MECHANISM 2.11.1 Entry No. I of Notification No. 10/2017- I.T. (Rate) dated 28.06.2017 notifies the category of supply of services wherein the whole of integrated tax leviable under Section 5 (I) of the IGST Act, 2017 is required to be dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of Prettl Automotive India Pvt Ltd 2021 (46) G.S.T.L.319 (AAR-GST-Mah. Therefore, the advance ruling application made by the applicant is admissible. 2.14 The Hon'ble Supreme Court in the case of Vikas Sales Corporation 2017 (354) ELT 006 SC examined the definition of movable property under General Clauses Act, 1897, and held as under:- 'Similarly, patents, copyrights and other rights in rem which are not rights over land are also included within the meaning of movable property. 2.15 Further, the Hon'ble Bombay HC in the case of Commissioner of ST Vs Duke and Sons, has also relied on the decision of the Supreme Court in the case of Vikas Sales Corporation v/s Commissioner of Commercial Taxes and has held that trademarks are goods within the meaning of clause (5) of Section 2 of the 1985 Act. 2.16 The above cited case laws leave no room for ambiguity that "Trademarks" will be considered as Goods" for the purposes of CGST Act, 2017. 2.17 As per Entry I(a) of schedule II to the CGST Act, 2017 'any transfer of title in goods is a supply of goods'. The transaction in question is a transfer of title in goods (Trademark) and hence, will be supply of goods as per Schedul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty, In view Of above definitions, it can be concluded that, intellectual property rights not being immovable property falls under term movable property. 3.3 Further, according definition of section 2(52) of CGST/SGST Act "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops; grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Thus, as per the said definition the term goods include every kind of movable property except for the ones excluded. In view of above facts and provisions of law, intellectual property rights is movable property, hence, trademark Jalra and Jalra M of "pharmaceutical preparations falls under definition of goods under GST law. 3.4 Entry no. 17 of Notification No 8/2017-I.T.(Rate) dated 28.06.2017 provides for IGST rates of services, temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP} right in respect of goods other than Information Technology software. Entry no 243 of schedule II of Notification No 1/2017-I.T. (Rate) dated 28.06.2017, provides for IGST rates of good....
X X X X Extracts X X X X
X X X X Extracts X X X X
....view of above discussion, facts of the case and provisions of GST law, this office is of opinion that, activity of assignment of trademark Jalra and Jalra M by NAG to the applicant is supply of goods. Since it is not supply of service it will not be covered by entry no I of Notification No 10/2017-lntegrated Tax (Rate) and entry no 17 (i) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 (as amended). 04. HEARING 4.1 Preliminary hearing in the matter was held on 11.02.2020. Shri. Sanjeev Nair, Advocate, Shri. Kevin Gorgi, CA, Shri Vinay Potdar and Shri. Yogesh Mistry, both, Company Representatives, appeared, and requested for admission of the application. Jurisdictional Officer Shri. Prashant Patil Commr., E-601, LTU- l, Mumbai also appeared. 4.2 The Application was admitted and called for final e-hearing on 28.09 2021. The Authorized representatives of the applicant, Shri. Sanjeev Nair, Advocate, Shri Kevin Gorgi, Advocate, Shri Yogesh Mistry, Sr. DGM Supplier Chain, and Shri. Sandeep Naik, AGM Accounts were present. The concerned jurisdictional officer Shri. Prashant Patil, DC. E-601, Mumbai was present. 4.3 We heard both the sides. 05. DISCUSS....