AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 909
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....stance from Coal Mines are mandatorily required to get raw coal washed before captive consumption for meeting percentage ash stipulations as the ash content in raw coal being received from CIL sources is generally on higher side. (3) On the quantity procured by the Applicant from CIL Sources. Applicant pays GST @ 5% IGST along with Compensation Cess @ Rs. 400/- tonne to its supplier (CIL sources) in compliance with provisions contained in the statute read with rules and notification. (4) Since such raw coal procured by Applicant is mandatorily to be washed before captive consumption. Applicant has engaged some washeries in private sector on job work basis for the job of raw coal beneficiation who in turn supply washed coal to Applicant. (5) However, in the process of raw coal beneficiation by washery /job worker, certain low quality coal is also generated (having ash more than the prescribed %) which is commonly referred to as 'coal rejects' which is disposed off/soId directly by the washery/job worker in an environment friendly manner. (6) Terms of the engagement with washery job worker, inter-alia, include:- a) That washery/job worker shall directly l....
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....) of the PGST Act, 2017. Hence, the application of the applicant is eligible for a ruling by the Punjab State Advance Ruling Authority. 5. SUBMISSIONS BY THE APPLICANT:- 5.1 The applicant has made the following submissions at the time of filing of advance ruling application:- (1) for generation of electricity, inter alia, an essential raw material is 'coal' which Applicant procures from Coal India Ltd (CIL) sources However, as per the guidelines laid down by Ministry of Environment and forest. Applicant having its plants located at long distance from Coal Mines are mandatorily required to get raw coal washed before captive consumption for meeting percentage ash stipulations as the ash content in raw coal being received from CIL sources is generally on higher side. (2) Since such raw coal procured by Applicant is mandatorily to be washed before captive consumption. Applicant has engaged some washeries in private sector on job work basis for the job of raw coal beneficiation who in turn supply washed coal to Applicant. In the process of raw coal beneficiation by washery/job worker certain low quality coal is also generated (having ash more than the prescribed %) w....
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.... (1000 tonnes in total). ITC shall be allowed directly of GST & Compensation Cess paid by the Applicant on so much quantity which is directly attributable to 'coal rejects', meaning thereby, ITC of GST & Compensation Cess paid by the Applicant on purchase of 200 tonnes (out of total 1000 tonnes) of s raw coal from CIL or CCI sources 5.3 The applicant has further made the following additional submissions dated 17.02.2022, regarding certain queries raised by Hon'ble AAR and documents sought:- (i) That proviso to sub-section (2) of Section 98 of the CGST Act, 2017 provides "Authority that not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act." (ii) That, the questions with respect to the taxability & eligibility of Input tax Credit was raised by the Applicant at the time of filing of Advance Ruling application in January 2020 when no proceedings with respect to coal rejects were pending against the Applicant and thus, application so filed by the Applicant is a valid application (iii) That, enquiry was initiated by the office of D....
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....R-3B which is also not reflected in noticee's E-credit ledger. (vii) that the third question raised by the Applicant is whether Appellant is eligible for Input Tax Credit (ITC) of input tax paid on procurement of raw coal (of only so much quantity which is attributable to coal rejects) or whether Appellant has toi avail ITC as per Section 17 of the Act read will. Rule 42 of the Rule i.e. In proportionate formulae. Therefore, in case Appellant has avail ITC on coal rejects as per Rule 42 of the Rules. Appellant has to first take into account the entire Common credit which might involve a number of Input/Input Services such as.- • Entire Tax paid on purchase of raw coal from CCL or CH sources • Entire tax paid by the Appellant on beneficiation /Job work charges collected by Monnet for processing on raw coal: • Entire tax paid by the Appellant on transportation charges collected by Monnet for transportation of raw coal from mines to washery: • Entire tax paid by the Appellant on certain administrative expenses, like Rent paid for office as well as plant (if any). Telephone Expenses, Security Guard expenses, Accounting, Auditin....
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....wing issues:- 1. Whether the "coal rejects' whose invoice is raised by Applicant upon washery/job-worker, is taxable under GST Act and Compensation Cess Act in the hands of Applicant? 2. If the answer to above question is yes. whether applicant is eligible to avail Input Tax Credit (ITC) of GST and Compensation Cess of raw coal brought from its supplier and transferred to washery/job worker for cleaning? 3. If the answer to above question is yes and ITC is admissible, what is the admissible proportion of Input Tax Credit? Applicant is engaged in generation, transmission and distribution of electric energy and having both taxable and exempted outward supplies, for generation of electric energy, applicant buys raw coal form its vendor namely Coal India Limited (CIL) and its subsidiaries' for use in thermal power plants situated in the State of Punjab As per the guidelines laid down by the Ministry of Environment and forest. Govt of India, raw coal is washed before captive consumption for meeting percentage of ash specifications as ash content in raw coal received from CIL is higher. But during this whole process. raw coal, washed coal and coal re....
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....ourse or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; (aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37; (b) he has received the goods or services or both. Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or duri....
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....2022, 11.02.2022, 18.02.2022 & 05.08. 2022 M/s APRA & Associates, CA Anmol Gupta, Tejpal Bansal, Addl. S.E. and CA Vishal Gill appeared for hearing at various dates as mentioned in the Table at the beginning of this order. At, the first hearing the applicant was asked to clarify whether any proceedings under the Act are pending in respect of the matter in question. Representative submitted that the DGGI had sought some information in September, 2020 alter the application for AR had been submitted, Further, submitted that the information was generic and not specific to Coal rejects. Applicant was asked to share the complete details of the proceedings. Applicant also submitted synopsis cum additional submissions which were brought on record. Next hearing was fixed for 11.02.2022, wherein the applicant sought time to submit details of DGGI investigation and copies of Invoices. In the next hearing dated 18.02.2022. the applicant submitted the additional documents sought which were also brought on record. On the last hearing of the case i.e. on 05.08.2022. The applicant submitted that they have nothing more to submit on the matter Accordingly the proceedings of the case were concluded. ....
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....th higher percentage of Ash content. HSN 2701 covers "Coal; briquettes, avoids and similar solid fuels manufactured from coal". Therefore. Coal rejects are rightly classifiable under HSN 2701 and as per Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017. 2.5% Central GST is also leviable for the same heading i.e. 2701 under schedule-I, further, as per Notification No. 01/2017- compensation cess (Rate) dated 28.06.2017. Rs. 400 per tonne is leviable as compensation cess under Chapter Heading Sub-heading 2701. Also, vide press release dated 18-01-2018 issued by the Press Information Bureau, Government of India, Ministry of finance recommended for changes in CGST/IGST Rate and clarifications in respect of GST Rate on certain goods as per discussions held in the 25th GST Council Meeting held on 18th January 2018. which is extracted as under: Sr.No. Chapter /Heading / Sub-Heading/Tariff-item Description Present Rate Modification /Clarification recommended 3 2701 Coal rejects 5% + Rs. 400 PMT Compensation Cess Coal rejects fall under heading of 2701 and attract 5% GST and Rs. 400 PMT Compensation Cess Accordingly as per above clarification. Coa....
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.... (b) he has received the goods or services or both. Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person. (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:" and. Section 17. Apportionment of credit....
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....ding the driver), except when they are used for making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) vessels and aircraft except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; (ii) for transportation of goods; (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa): Provided that the input tax credit in respect of such services shall be available- (i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein; (ii) where received by a taxable person engaged- (I) in the manufacture of such motor vehicles, vessels....
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....f sections 74, 129 and 130. (6) The Government may prescribe the manner in which the credit referred to in sub-sections (1) and (2) may be attributed. Explanation.- For the purposes of this Chapter and Chapter VI, the expression "plant and machinery" means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes,- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. The first proviso to sub section (2) of section 16 provides that where the goods are being received in lots or installments. the registered person shall be entitled to take credit upon receipt of the last lot or installment. Thus, if the applicant fulfils the eligibility conditions as prescribed under Section 16 of CGST Act. 2017 and if the type of ITC do not fall under the categories prescribed under Section 17 of CGST Act, 2017. the applicant is eligible to avail Input Tax Credit of GST and Compensation Cess of raw coal b....
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....action in securities, sale of land and sale of building subject to clause 5(b) of schedule II are also covered within the ambit of exempt supplies, Hence, ITC will be admissible in proportion of taxable supplies made by the applicant. Further Para No. 3.4 and 3.6 of the applicant is reproduced as under:- 3.4 Accordingly it is sought that whether Applicant will be allowed credit as per the formula given under Section 42(1) ibid i.e proportionately or since the quantity at 'coal rejects can be easily quantified/mapped. therefore GST and cess of 'raw coal' pertaining to such quantity of 'coal rejects ' so generated is directly admissible 3.6 Here, if is pertinent to mention that since compensation cess on coal is being levied based on quantity i.e. Rs. 400 per tonne, instead of levy at ad valorem the quantity of coal rejects so produced can be easily segregated and mapped to raw coal purchased for the purposes of availing Input Tax Credit (ITC). if admissible. The proposal of the Applicant is not as per the provisions of the CGST Act, 2017 and the rules and corresponding PGST Act, 2017 and the rules made there-under. In terms of Section 1....