TaxTMI 
TaxTMI 
2024 (3) TMI 624
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....e same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the SGST Act, 2017. 1. This Appeal has been filed by Chanchai Saha (hereinafter referred to as "the Appellant") on 26.08.2023 against Advance Ruling Order No. 09/WBAAR/2023-24 dated 26.06.2023, pronounced by the West Bengal Authority for Advance Ruling (hereinafter referred to as the WBAAR'). 2. The appellant is an entity engaged inter-alia in the trade of Super Kerosine Oil, hereinafter also referred to as SK Oil, as a holder of license issued by the Government of West Bengal, authorizing him as a "Dealer" as defined under Kerosene Control Order, 1968. 3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017, (hereinafter collectively referred to as "the GST Act") on the following questions:- (i) Whether the applicant being a Fair Price Shop as defined under the Notification No. 2565/FS/FS....
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....ction 15 of the GST Act. 6. The Appellant has filed the instant appeal against the above-mentioned Advance Ruling dated 26.06.2023 with a prayer to set aside the said order along with the consequential relief; to grant personal hearing; and to pass such further order or orders as may be deemed fit and proper in the facts and circumstances of the case. 7. The appellant has primarily cited the following points in their grounds of appeal:- (i) That the AAR acted arbitrarily in passing the order without looking into the records in the file. (ii) That the AAR, while deciding against the most crucial and primary question of the application bearing question no. 1, had erred in ruling that the appellant is not making any supply to the State Government and therefore, no tax is to be charged to the State Government. (iii) That the AAR while interpreting the Section 2(93) of the said Act, had erroneously interpreted that the applicant is engaged in supplying S.K. Oil to the ration card holders as the monetary consideration against the sale of S.K. Oil is received from the ration card holders only, who are purchasing the S.K. Oil from the appellant's fair price....
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....ing that the appellant is not making any supply to the State Government and therefore, no tax is to be charged to the State Government. (iv) The AAR has failed to consider that "the person liable to pay the consideration" cannot always be equated with the person who is paying the consideration, when the definition of "consideration" under Section 2(31) of the said Act itself has kept a room for payments to be received by the recipient or by any other person. (v) In response to a query regarding ownership of the goods i.e. S. K. Oil the appellants' representative stated that the appellant retains ownership of the goods subsequent to their receipt from the 'agents' and prior to their sale to the ration card holder. (vi) The appellant, in their argument, referenced the Order dated 30.12.2021 issued by the Authority for Advance Ruling, Tamil Nadu, in respect of the application filed by M/s. Handloom Weavers Co-operative Society Ltd. 10. Discussion and Findings: 10.1 A concise summary of the appellant's submission is as follows:- (i) The appellant is a Dealer in whose name a license to sell S.K. Oil to ration card holders under the Public Distri....
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....e shops is supply of services to the State Government. 10.2 It is observed that no submission on behalf of the Revenue is available in this case. 10.3 The issues to decide upon are as follows:- (i) Whether the appellant being a Fair Price Shop as defined under the Notification No. 2565/FS/FS/Sectt/Sup/4M-16/2014 dated 3rd November 2014 issued by the Government of West Bengal, is liable to charge GST from the State Government against the supply made by them? (ii) Whether the other charges like Dealer's commission, Dealers Transport Charges, Stationery Charges, H&E Loss etc. would be chargeable to GST or treated as exempt? (iii) Whether the supply of "S.K. Oil" along with charges would be treated as a composite supply wherein the principal supply would be the supply of "S.K. Oil"? 10.4 Before entering into the issues of this appeal, the issue of PDS is required to be addressed. The Public Distribution System (PDS) is an initiative to distribute food and non-food items to the poor people of our country at subsidised rate and has been established by the Government of India under the Ministry of Consumer Affairs, Food and Public Distribution. Addition....
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...., an individual, registered partnership firm, registered Co-operative society, [Self Help Group or the Sangha or Mahasangha of Self-Help Group] working within a district, in whose name a shop has been licensed to distribute and sell public distribution commodities to ration card holder under the Public Distribution System by an order issued under Part III;]; b) "Fair Price Shop" means a shop engaged and licensed under this Control Order for distribution of public distribution commodities against ration documents; c) "Public distribution commodity" means such commodities from the list of essential commodities as may be declared to be public distribution commodity by the State Government and distributed from fair price shops, licensed under this Order; d) "Public Distribution System" means a system for distribution of public distribution commodities to the holders of ration documents through the Fair Price Shops; (ii) The appellant has been issued with a license for a dealer in kerosene under the Kerosene Control Order, 1968, which has been renewed till date and the appellant, as on date is selling S. K. Oil in terms of the said license; (....
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.... 2014 it is observed that the conditions has defined allotment of S. K. Oil to the dealer i.e. the appellant; and the appellant is responsible to distribute the said allotment to the Ration Card holders in correct measurement. (iv) In terms of the Memorandum No. DCG-16016(99)/l/2022-SEC(DCG)-DCG-Part(l)/711 dated 13.05.2022 the price of S. K. Oil at which the agent will sell S. K. Oil to the dealers and the retail price of S. K. Oil at which the Dealers will sell S. K. Oil to the consumers has been fixed. It is seen that as per the said Memorandum, the dealer's price includes, components like 'Dealer's Commission', Dealer's Transport Charges', Dealer's Stationery Charges' and "Compensation for Handling and Evaporation loss' are included in the price selling price of the 'Agent' to arrive at the MRP of the S.K. Oil. (v) It therefore appears that the price at which the appellant will sell S. K. Oil to the Ration Card Holder is not only fixed by the State Government rather the Government is also making provisions for different charges and compensations for the appellant by way of including components like 'Dealer's Commission', Dealer's Transport Charges', Dealer's S....
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....ranted in such a manner to control the price of the S. K. Oil distributed through PDS by the Government. Also, it is concluded that the appellant is acting as an agent by estoppel to the government. 10.11 Another issue that requires to be addressed while deciding upon this appeal remains whether the appellant qualifies as a "fair price shop" according to Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and is providing any service to the State Government. Now, while reviewing this issue in deciding on the appeal file by the appellant, the following points are observed: (i) The entry 11B of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 (as amended) is as below: 11B Heading 9961 or Heading 9962 Service provided by Fair Price Shops to State Governments or Union territories by way of sale of kerosene, sugar, edible oil, etc. under Public Distribution System (PDS) against consideration in the form of commission or margin. NIL NIL (ii) From the very language of this Notification, it is quite clear that Fair Price Shops those are providing service to State Governments or Union territories by way of sale of kerosene, sugar, edi....
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....ent by way of distributing of S. K. Oil as agent, it decided that the afore-mentioned notification is applicable for the appellant and the appellant is entitled for the benefit extended by the said notification. Since, in terms of the said Notification, the Tax liability of the appellant while providing service to the State Government is 'NIL' the question of charging GST from the State Government becomes inapplicable. 10.15 The second query that necessitates a determination is:- Whether the other charges like Dealer's commission, Dealers Transport Charges, Stationery Charges, H&E Loss etc. would be chargeable to GST or treated as exempt? 10.16 As already discussed, the appellant's sale price included components such as dealer's commission, dealer's transport charges, stationery charges, Compensation for Handling and Evaporation loss, among others, in order to guarantee a reasonable return on the capital invested and are actually Commission received by the appellant from the State Government. The government is able to regulate the price of S. K. Oil disseminated via PDS by granting these terms in this manner. In terms of Chapter 4 of the GST Rules, The value of suppl....