AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 166
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....- 334003, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as it falls under the ambit of the Section 97 (2) (a) given as under: (c) determination of time and value of supply of goods or services or both; (e) determination of the liability to pay tax on any goods or services or both; A. SUBMISSION OF THE APPLICANT (in brief):- M/s HITESH GWALANI (hereinafter referred to as the "applicant") are registered under GST having GSTIN 08CKPPG9845L1Z9. The applicant proposed to Start Business of Selling of various type of Scrap like old used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Aluminium Scrap, old used brass utensils and other scrap, used old steel utensils scrap, old used scrap of copper, used waste plastic bags & used plastic PET bottles etc. The applicant proposed to start purchase of all above mentioned goods from unregistered supplier in small quantity (50 kg to 500 kg approximately). The unregistered Supplies may be located in the same State on purchase of above-mentioned various item from unregistered suppliers. The applicant subsequently sale them to various manufacturers & propose to charge GST on the difference ....
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....rchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession." 3. As provided in Rule 32 (5) of the CGST Rules, 2017, the margin scheme is available in case of purchase and subsequent sale of second hand goods. In the present case, the Applicant wants to be engaged in the activity of procuring the used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Aluminium Scrap, old used brass utensils and other scrap, used old steel utensils scrap, old used scrap of copper, used waste plastic bags & used plastic PET bottles etc. (hereinafter referred to as scrap) in small quantities (50 to 500kg approx.) from various unregistered suppliers situated within the State of Rajasthan and outside Rajasthan. 4. For goods to qualify as second hand goods as per Rule 32 (5) of the CGST Rules, 2017 such goods need be (1) used goods as such or goods after minor processing that does not change the nature of goods (2) goods on which no Input Tax Credit has been availed. 5. That used Iron Scrap, used Lead Acid Batteries old used ....
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.... scrap of copper, used waste plastic bags & used plastic PET bottles etc. as just like used bottles no processing is done on the used lead acid batteries. Therefore, in the Applicant's view, these used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Aluminium Scrap, old used brass utensils and other scrap, used old steel utensils scrap, old used scrap of copper, used waste plastic bags & used plastic PET bottles etc qualify to be second hand goods. Accordingly, the Applicant dealer is entitled to operate under the Margin Scheme in respect of the old used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Aluminium Scrap, old used brass utensils and other scrap, used old steel utensils scrap, old used scrap of copper, used waste plastic bags & used plastic PET bottles etc. Also AAR (Rajasthan) has given decision in case of M/s Shambhu Traders Pvt. Ltd. on 15th Dec. 2019 on similar grounds. In the said AAR, Authority has stated that the used lead acid batteries qualify to be second hand goods accordingly, the applicant/dealer is entitled to operate under margin scheme in respect of the used lead acid batteries. The Rule 32 (5) of t....
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....ld used brass utensils and other scrap, used old steel utensils scrap, old used scrap of copper, used waste plastic bags & used plastic PET bottles etc. to manufacturers whether the goods when sold outside the state or when sold within the state of Rajasthan qualifies under the Margin Scheme. D. PERSONAL HEARING In the matter, personal hearing was granted to the applicant on 19.02.2024. Mr. Ashish Gwalani, C.A. and Authorized Representative appeared for personal hearing. He reiterated the submission already made by them. E. COMMENTS OF THE JURISDICTIONAL OFFICER:- Comments received from the Assistant Commissioner state tax Ward-Ill, Circle-B, Bikaner vide letter S.No.409 dated-26.12.2023 are as under: - In this regard, it is submitted that Firm M/s. HITESH GWALANI (BABA SUPPLIER) GSTIN : 08CKPPG9845L1Z9 registered at Office of Assistant Commissioner, State Tax, Ward-Ill, Circle-B, Bikaner requested for advance ruling as below : - 1. When the applicant is operating under the Margin Scheme notified under Rule 32 (5) of the Central Goods and Service Tax Rules, 2017 ("CGST Rule, 2017") by selling the old used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & oth....
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....9;s scrap as a whole, most of them are not to be used furthermore as a commodity. Actually, the said items used as primary content or as raw material in the supply chain. Here is no possibilities of title holding or sustain reusability. So, the dealer fails to identify the difference between Scrap and second-hand goods. So, on these items margin scheme is not applicable. There is no question of Double taxation on these goods, because the parents items have realized their full value and these items are merely left over. So, therefore no question arises of applicability of Margin Scheme on scrap items as proposed by dealer and also same with question no. 2 as well. F. FINDINGS, ANALYSIS & CONCLUSION: 1) We have carefully examined the statement of facts, supporting documents filed by the applicant along with the application, oral and written submissions made at the time of hearing and the comments of the Central Tax Authority. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. 2) The applicant in engaged in purchasing and selling of used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Alumi....
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....(Central Rate) dated 25.01.2018 in respect of Margin Scheme under Rule 32 (5) of CGST Act, 2017. On perusal of same we find that benefit of Margin Scheme is available only with respect to Motor Vehicles only where as the items to be dealt with by the applicant such as used Iron Scrap, used Lead Acid Batteries old used Aluminium utensils & other Aluminium Scrap, used old Steel utensils scrap & old used scrap of copper, old used Brass utensils and other scrap, used waste plastic bags& used plastic PET bottles are different from Motor Vehicles. 9) Thus we have reached to the conclusion that since the items to be dealt with by the applicant do not qualify to be Second Hand Goods, the applicant is not eligible to operate under Margin Scheme in term of Rule 32 (5) of Central Goods and Service Tax Rules, 2017 read with corresponding provisions of SGST Rules, 2017. 10) The second clarification sought by the applicant is that whether they are eligible for benefit of Margin Scheme for intra state supply or inter-state supply of goods. 11) Since above, we have established that the applicant is not eligible to operate under Margin Scheme in term of Rule 32 (5) of Central Goods and Service T....