AI Drafter 
TaxTMI 
TaxTMI 
2022 (9) TMI 365
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....es by outside caterer to our employees in respect of Business conference meetings. 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. As per statement of facts submitted by the applicant- (i) The Applicant is engaged in the business of Trading of Animal Health Products. (ii) their product groups are classified into Antibiotic, Anthelmintic, and Analgesic & Antipyretic, Anti-Spasmodic, Ectoparasiticide, Feed Supplement, and Progesterone. (iii) The products supplied by them are both taxable and exempted under the GST Act. (iv) they sell their products through various retail stores across the country and obtain substantial revenue. (v) With the objective of expanding the market share, they launched some sales promotional offers to enhance sales of their products. (vi) The sales promotional offers are named as "BUMPER OFFER, WINTER BONANZA" etc. (vii) The current scheme is valid from 1St January 2022 to 31 St March 2022. (viii) This scheme is applicabl....
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....a India Pvt. Ltd. Vs CCE Pune 2009 (8) TMI 50 (BOM HC). (v) they had launched several Sales promotion schemes titled "Bumper Offer", "Winter Bonanza", "Power Bonanza" etc. Based on the quantity and value of products purchased by the retailers, they are awarded certain rewards as per the scheme. (vi) they are eligible to claim input tax credit in respect of procurement of input and input services of those products which are distributed to retailers as rewards because they procure these goods and services in the course of business and it has direct nexus with the business carried on by the company (vii) the products like Milton Double Decker lunch box, Electric Kettle, Iron, Ceiling Fans etc. procured by them will be used in course of business by way of handing over them as rewards to eligible retailers who participated in the scheme. (viii) In reference to the question, bundle of services is being offered to the delegates, reference to the concept of 'composite supply' under CGST Act, 2017 is required: (ix) "composite supply" means a supply 'made by a taxable person to a recipient consisting of two or more taxable supplies of ....
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....everages supplied by outside caterers, Section 17(5) provides that ITC of tax paid on food and beverages shall be available to the applicant because the applicant will use such inward supply as an element of an outward supply for meeting and conferences which will create a higher Sale. (xviii) hence, the composite supply provided by the supplier to us shall be treated as a supply of service of organization of conference & meetings. (xix) They placed reliance on the case laws of Ms. All Rajasthan Corrugated Board and Box Manufacturers Association (GST AAR Rajasthan) 6. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. The Deputy Commissioner, CGST Div I, Ghaziabad vide his letter C.No.V(30)/Tech GZB/D-1/AAR/16/2022/541 dated 13.05.2022 has submitted that- (a) the GST paid on inputs/input services procured for promotional scheme are not eligible for input tax credit under GST kaw on following grounds- (i) Section 17(5)(h) of the CGST Act, 2017 stipulates that the input tax credit is not available in respect of the following- Goods lost, sto....
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....d like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the 'CGST Act'. 9. We have gone through the submissions made by the applicant and have examined the explanation submitted by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2)(d) of the CGST Act 2017 being a matter related to admissibility of input tax credit of tax paid or deemed to have been paid. We therefore, admit the application for consideration on merits. 10. We observe that the applicant has sought advance ruling on the issue- (1) Whether the GST paid on inputs/input services procured by us for promotional scheme are eligible for input tax credit under the GST law in terms of section 16 read with section 17 of the CGST Act, 2017? (2....
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....1) of the CGST Act, 2017, every registered person is eligible to credit of input tax charged on the goods/services supplied to him and which are intended to be used in the course or furtherance of his business. The applicant has contended that the goods are procured by them for distribution as a reward in the promotional schemes with the intended use in furtherance of business. The applicant have thus claimed that the conditions under Section 16 stands fulfilled. 12.4 But Section 17(5) of the CGST Act, 2017 deals with the situations wherein, the tax paid on inputs/input services are not available as Input Tax Credit even when such goods/services are procured for furtherance of business. The said section starts with `Notwithstanding anything contained in sub section (1) of section 16'. If a provision contains a clause "notwithstanding anything contained in this Act" or "notwithstanding anything contained in some particular provision in the Act", the said clause is known as a non-obstante clause. This is always inserted at the beginning of a provision with the objective of giving the provision an overriding effect over the statute or provision mentioned in the non-obstante cla....
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....................." 12.8 The promotional scheme was extended by the applicant at their own will voluntarily without any consideration in money. The goods distributed under promotional scheme are not in the nature of discounts to the products but are in the nature of personal consumables and qualifies to be termed as gifts. The 'Scheme Circular' provided by the applicant alongwith Form GST ARA-01 also contains the words 'Gift Option 1', 'Gift Option 2' and 'Gift Option 3'. Further, the gift items are fixed based on the retailers purchase of the targeted products as per Annexure C of the Form GST ARA-01 and not on the sales made by the retailers. Moreover, the rewards are handed out to the successful retailers and no tax invoice/any taxation document are raised for such handout. Also, the goods are distributed on fulfillment of the conditions of the scheme, with no separate consideration, therefore, the distribution of goods and services to the retailers as per the Scheme is not a 'Supply' as defined under Section 7 of the CGST Act. Section 17 (5)(h) expressly restricts ITC on such gifts, even if they are procured in the course of furtherance....
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....ction 16 and 17(5)(b) of the Central Goods and Services Tax Act, 2017, it is observed that the ITC with respect to food and beverages and outdoor catering shall be available only where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. 13.4 We find that the applicant is engaged in the business of trading of animal health products and not in the business of provision of food or catering.. Even if the provision of food and catering had been in the course of furtherance of business, the applicant is not entitled to the input tax credit in light of the express bar provided under Section 17(5)(b)(i) of the CGST Act, 2017. 13.5 We find that the applicant has placed reliance on the order of the Authority of Advance Ruling of Rajasthan in case of Ms. All Rajasthan Corrugated Board and Box Manufacturers Association (GST AAR Rajasthan. In the said case, the applicant was engaged in providing service in the form of technical Seminars, access to exhibition, hotel room Accommodation, cultural programs, lunch & dinner....