TaxTMI 
TaxTMI 
2022 (4) TMI 464
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...., 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 is an agent of Indian Oil Corporation Limited (IOCL) and is engaged in the distribution of Superior Kerosene Oil (SKO) for domestic purposes to fair price dealers. The applicant supplies the goods only to dealers which are permitted / approved by the Director of Consumer Goods, Department of Food and Supplies, Government of West Bengal. Further, the price at which the applicant can supply as an agent along with the elements of such prices are also fixed by the District Controller, Food and Supplies, Government of West Bengal. ....
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....l Corporation Limited at an approved selling price to the tagged S.K.Oil Dealers and Permit Holders as directed by the Licensing Authority. 2.2 It is submitted by the applicant that it is obligatory from his part to comply with the provisions of the West Bengal Kerosene Control Order, 1968. Para 5(iv), 5A and 5B (iii) of the said order reads as follows: Para 5(iv): "No Agent shall sell, supply or transfer Kerosene to any person other than an S K Oil Dealer duly licensed under Paragraph 6 of this order or a holder of Permit issued under Paragraph 11 of this order" Para 5A: "Every agent after having allocation of S K Oil made by the DCG for distribution to S K Oil dealers shall take delivery of allocation from the concerned Oil Marketing Company. While making an allocation, the DCG shall consider the weekly or fortnightly requirements of the concerned agent on the basis of ration cards tagged and scales of distribution of S K Oil as may be fixed by the State Government from time to time and balance stock in hand". Para 5B(iii): "The Agent shall not charge any excess price other than the fair price fixed by the State Government from time to time and shall....
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..../Dealers. 2.7 The applicant submits further that even if it is assumed that the other charges do get covered within the aforesaid exemption entry, the said exemption is applicable only if standalone supply of such services is made. However, where the supply is a composite supply, the nature of principal supply needs to be reviewed in order to determine taxability of other charges. 2.8 The applicant contends that supply of kerosene oil and other charges like transport, commission, stationery, H & E Loss etc. are naturally bundled in the ordinary course of business. Since there are two or more taxable supplies, this would be treated as a composite supply and the principal supply would be supply of Superior Kerosene Oil in the given case as it constitutes the predominant element of the composite supply. Therefore, rate of tax applicable on other charges would be the same as that on Superior Kerosene Oil i.e. 5% and other charges cannot be treated as exempt. 2.9 However, if the other charges are treated as exempt, ITC reversal under Rule 42 would only be attracted on the common input and input services since procurement of Superior Kerosene Oil from IOCL would be treated as fu....
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....nsed to distribute S K Oil under West Bengal Kerosene Control Order. Further, as regards to condition (c), though he is not distributing to the consumers directly having ration cards, he is indirectly doing it through the dealers / permit holders. 2.17 However, as regards to condition (a), the applicant has referred the definition of "dealer" given in para 3(h) of the West Bengal Kerosene Control Order 1968, which reads as follows: "dealer" means an individual person, or a registered partnership firm, or a registered Cooperative Society, or a Sangha or mahasangha of Self-Help Group working within a district in whose name a licence to sell S.K Oil under the Public Distribution System has been issued under clause 6." 2.18 The applicant argues that the above-noted definition speaks that licence to sell S.K Oil under the Public Distribution System is to be granted under clause 6 of the West Bengal Kerosene Control Order 1968 so as to qualify as a dealer. However, the applicant has been granted the license under Para 5 of the said order. 2.19 According to the applicant, he satisfies definition of 'Agent' mentioned under Para 3(b) of the West Bengal Kerosene Control Ord....
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.... Moreover, notification number 21/2017 dated 22/8/2017 has specified that tax rate would be nil for both Central and State GST in respect of HSN 9961 or 9962 for supply of service by fair price shops to Government for sale of SKO, sugar, edible oil etc against consideration in the form of commission or margin is nil. Supply of kerosene and food items through PDS is a function entrusted to Panchayat under Article 243G of the Constitution of India and entrusted to a municipality under Article 243W of the Constitution of India. 3.2 From the submission made by the petitioner before the Advance Ruling authority, it appears that the petitioner can sale SKO at the rate fixed by the District Controller, Food and Civil Supplies, Nadia, Govt of W.B. which is the same rate at which the applicant is procuring SKO from IOCL as an agent of the said Oil Marketing Company. Section 2(5) of the CGST Act, 2017/ WBGST Act,2017 states that '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 anoth....
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....s like agent's commission, agent's transport charges, stationery charges, compensation on handling & evaporation loss as the District Controller (F & S) has placed reliance on the order issued by the Principal Secretary to the Government of West Bengal, Food and Supplies Department dated 3rd November 2017 which takes reference of Notification No. 1498-FT dated 22nd August 2017 of the Finance Department (Revenue), Government of West Bengal read with Notification No. 21/2017- Central Tax (rate) dated 22nd August 2017 to state that the tax rate would be NIL for both Central and State GST in respect of following: 'Service provided by Fair Price Shops (FPS) to State Government by way of sale of kerosene, sugar, edible oil etc. under Public Distribution System (PDS) against consideration in the form of commission or margin'. 4.4 However we do not find any reference of the said order in the memo dated 01.10.2021 issued by the District Controller (F&S), Nadia (photocopy of the memo has been submitted by the applicant) on the subject matter of 'Revised retail price of S.K.Oil w.e.f. 01.10.2021. 4.5 We first take the issue to decide whether the exemption provided in the above-....
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....n supplies it to the consumers i.e., the ration card holders. The Sub-Divisional Controller, Food & Supplies, Ranaghat issues delivery orders to the applicant for supply of S.K.Oil, which inter alia contains (i) Name of the S.K.Oil Retailer and (ii) Name of the tagged FPS Dealer. 4.12 In the light of the aforesaid facts, we are of the view that the applicant cannot be regarded as a 'fair price shop'. Since the entry serial number 11A of Notification No. 1498-FT dated 22.08.2017 [Central Notification No. 21/2017-Central Tax (Rate) dated 22.08.2017] specifically refers supply of services provided by Fair Price Shops (FPS) and the applicant doesn't qualify to be a 'fair price shop', we refrain to discuss on applicability of the other aspects of the supply as referred to in the said entry i.e., (i) whether the applicant is supplying services to State Government or (ii) whether the applicant receives consideration in the form of commission or margin. 4.13 According to the rate chart fixed by the District Controller, Food and Supplies, Nadia, Government of West Bengal, the applicant supplies S.K. Oil to dealers and issues invoices where tax is charged only on the base price of Kero....
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.... an agent or on account of the Corporation except to the extent if any, permitted by the Corporation in writing and the Corporation shall not in any way be liable in any manner in respect of any such contracts, engagements or transactions and/or in respect of any act or omission on the part of the dealer, his servants, agents and workmen in regard to such sale or otherwise. 4.18 We therefore cannot accept the observation of the officer concerned from the revenue that the applicant is merely recovering the commission which he is eligible to earn from the IOCL in his capacity of an "agent". 4.19 In the instant case, the applicant admittedly charges, other than price of kerosene, commission, transportation charges, stationery charges, compensation on handling & evaporation loss, to the recipient of goods i.e., dealers which are permitted / approved by the Director of Consumer Goods, Department of Food and Supplies, Government of West Bengal. 4.20 We are, therefore, of the view that the other elements involved in the instant supply shall not qualify for exemption. Therefore, the amount received by the applicant in this regard shall form a part of the value of supply on which t....