TaxTMI 
TaxTMI 
2024 (7) TMI 1236
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....ud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 1) At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matter and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017. 2. The applicant submitted a copy of challan dated 17-10-2023 evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. The online application form for advance ruling dated 17.10.2023 was physically received on 06.11.2023 as mandated under Rule 107A. 3.1. M/s. Last Forest Enterprises Private Limited (hereinafter referred to as "Applicant") is a Private Limited Company incorporated under the erstwhile Companies Act, 1956 and its ....
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....mber: 1/2023 GCP/GLO/015/MUL, which is titled as "Strengthening Conservation, Enterprise & Livelihoods in the Nilgiris Biosphere Reserve" Focus on Beeswax products and Coffee. 3.8. The Food and Agriculture Organisation of the United Nations (FAO) is a specialized agency of the United Nations works to improve agricultural productivity and food security, and to better the living standards of rural populations. It also has an aim to defeat hunger and improve nutrition and food security with the help of international efforts. 3.9. The FAO of UN is a specified international organisation declared by the Government of India in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947). 3.10 The applicant had suffered the major losses by way of lack of capital, slowing down and stopping of cash flows and collapsing the distribution and marketing network due to Corona Pandemic Lockdowns in India and worldwide. 3.11 In order to re-imagining of running the green enterprise units of the Applicant in a sustained manner, the applicant Company was in urgent need of investments and hence, it had approached the FAO of UN for funding. Accordingly, the....
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....no exchange of consideration between the recipient organisation and the payee organisation (FAO of UN). Main motive behind the grant is that the operation of the applicant Company can't be disturbed in lieu of the financial obstacles they have faced as it would have direct impact on the Tribals and other Backward Communities who depends on the applicant. Applicant's submissions pertaining to interpretation of law 3.16 The applicant submitted that the grant receipt from the Food and Agriculture Organisation does not amount to the term "Supply'' as defined under Section 7 of the CGST Act, 2017 and stated Section 7 of the CGST Act, 2017 and Schedule I & Schedule II to the CGST Act, 2017 in support of their claim. 3.17 The applicant further stated that as per the Oxford Advanced Learner's Dictionary, "Supply" as a verb is defined as "to make available for use or to provide something to someone" and in the Cambridge dictionary as "to provide something that is wanted or needed". Whereas, in the transaction between the applicant and the FAO of UN, nothing will be supplied to the FAO of UN for the grant given by them. It is purely a gratuitous grant from the ov....
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....a) where a consideration is payable for the supply of goods or services or, both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied. Section 2 (105) - Supplier of Goods or Services (105) supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied, 3.21 The applicant submitted that in the instant case, the FAO of UN, the grantor organisation nothing will be received from the applicant Company in lieu of grant ....
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.... does not attract GST. ii. Supply should be made for a consideration. iii. Supply should be made in the course or furtherance of business iv. Supply should be made by a taxable person v. Supply should be a taxable supply vi. Supply should be made within the taxable territory Based on the above, the applicant stated that the grant receipt from the FAO of UN is not fulfilling the criteria specified in the Section 7 of the CGST Act, 2017. Accordingly, the said receipt can't be termed as "Supply" for the purpose of determination of taxable supply under the CGST Act. 3.26 The applicant summarized the following based on the definition of supply U/s. 7 of the CGST Act, 2017; SI.No. Ingredients to constitute supply Application in the facts of the said case 1 Supply of goods or services. Supply of anything other than goods or services does not attract GST Here, nothing is supplied to the FAO of UN in lieu of grant provided by them. The receipt of grant from the FAO of UN is an aid to overcome the financial obstacles of the applicant and to strengthen its market base. 2 Supply should be made for a consideration ....
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....n, - (i) the supplier of service is located in India, (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; (or in Indian rupees wherever permitted by the Reserve Bank of India); and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 3.30 The applicant further stated that the grant from the FAO of UN would qualify as zero-rated supply in terms of Section 16 of the IGST Act, 2017; that Section 7 (5) of the IGST Act, 2017 provides that the supply of service shall be treated as a supply of service in the course of inter-State trade or commerce when the supplier is located in India and the place of supply is outside India and that as per Section 2 (23) of the IGST Act, zero-rated supply' shall have the meaning assigned to it in Section 16 of the IGST Act. Section 16 of the IGST Act, defines zero-rated supply as under;- 16. (1) "zero rated supply" means any o....
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....rom the applicant to FAO of UN as the receipt is a grant and hence, it is not applicable 3 The place of supply of service is outside India Section 13 (2) of the IGST Act No supply of service from the applicant to the FAO of UN grant provider. Hence, this is not applicable. 4 The payment for such service has been received by the supplier of service in convertible foreign exchange. The applicant has received the grant in convertible foreign exchange 5 The supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in Section 8. Applicant (supplier of service) and Foreign University (recipient of service) are not merely, establishment of a distinct person 3.33 The applicant submitted that based on the above, no service shall be provided either within India or Outside India to the FAO of UN, a provider of grant or on their behalf in lieu of grant received. Instead, the grant will be utilised for the purpose for which it was sanctioned as per the budget lines specified by the grantor. However, the grant received or will be received from the FAO of UN, an overseas....
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....1947) and reproduced the same as follows;- 3. Power to confer certain privileges and immunities on other international organisation and their representatives and officers.- Where in pursuance of any international agreement, convention or other instrument it is necessary to accord to any international organisation and its representatives and officers privileges and immunities in India similar to those contained in the provisions set out in the Schedule, the Central Government may, by notification 2 in the Official Gazette, declare that the provisions set out in the Schedule shall, subject to such modifications, if any, as it may consider necessary or expedient for giving effect to the said agreement, convention or other instrument, apply mutatis mutandis to the international organisation specified in the notification and its representatives and officers, and thereupon the said provisions shall apply accordingly and, notwithstanding anything to the contrary contained in any other law, shall in such application have the force of law in India. 1 Provisions set out in the Schedule have been extended with certain modifications to the following organisations by ....
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....ent Circle stated that there is no proceedings pending in relation to the issue raised in the application by the Applicant and the Joint Commissioner (ST), Intelligence, Coimbatore stated that there is no pending proceeding in their office against the Applicant. 6. PERSONAL HEARING The applicant, was given an opportunity to be heard on 26.03.2024. Mohamed Abubecker Sidhick, Chartered Accountant, appeared in virtual mode, for the personal hearing as the Authorised Representative (AR) of the Applicant. The AR explained in brief about the business of the applicant and submitted that they have received grant from Food and Agriculture Organisation of United Nations. The AR stated that since Food and Agriculture Organisation of United Nations is a specified international organization within the meaning of section 3 of the United Nations (Previliges and Immunities) Act, 1947 (46 of 1947) they have sought advance ruling as to whether the amount received in convertible Foreign Exchange by the applicant from FAO an overseas NPO (Non-Profit Organisation) is liable to GST or not. DISCUSSION AND FINDINGS 7.1 We have carefully considered the submissions made by the applicant in the a....
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....f production centres among the said groups and such other upliftment projects. 7.4. We find that the applicant has submitted that they suffered major losses by way of lack of capital, slowing down and stopping of cash flows and collapsing of distribution and marketing network due to Corona Pandemic Lockdowns in India and worldwide and that they were in urgent need of investments and hence, they had approached the FAO of UN for funding. Accordingly, the FAO of UN has sanctioned the USD 24,893/- by way of grant to the applicant for re-imagining, manage cash flow shortages and to overcome all other marketing obstacles they faced during the Pandemic Lockdowns. The applicant has also submitted that the grant sanctioned by the FAO of UN is a gratuitous grant under the projects of the said UN organization and it has to be utilised according to the budget lines specified in the agreement within the timelines specified. The said budget lines were determined based on the proposal submitted by the applicant Company to the FAO of UN. 7.5. In view of the above facts it becomes imperative to dwell into the provisions of GST law regarding "levy' 'supply' and 'consideration&#....
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....idual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation.-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;] (b) import of services for a consideration whether or not in the course or furtherance of business;[and] (c) the activities specified in Schedule I, made or agreed to be made without a consideration; [****] (d) [****]. [(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II] (2) Notwithstanding anything contained in sub-section (1),- (a) activities or transactions specified in Schedule III; or (b) such activities or t....
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....l be supplied to the FAO of UN for the grant given by them. It is purely a gratuitous grant from the overseas UN linked autonomous and Non-Profit Organisation for the use of the applicant to overcome the obstacles suffered in difficult situation and mainly concentrates on the indirect welfare of the people who depends on the applicant Company. We find that the applicant submits that an amount of USD 24,893/- was sanctioned, by way of grant to the applicant Company for re-imagining, manage cash flow shortages and to overcome all other marketing obstacles they faced during the Pandemic Lockdowns. That the grant sanctioned by the FAO of UN is a gratuitous grant under the projects of the said UN organization and it has to be utilised according to the budget lines specified in the agreement within the time lines specified. The said budget lines were determined based on the proposal submitted by the applicant Company to the FAO of UN. 7.10 We find the applicant submits that the grant received by the applicant shall be released in two phases for achieving the two milestones:- Payment #1: USD 16,000/- upon verification by FAO of achievement of Milestones, to be completed by August 20....
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....ation" in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; 7.15 Hence, consideration refers to payment made towards supply of goods or services or both. However in the instant case we find that there is no supply of goods or services or both involved in the transaction between the applicant and the FAO and we are of the opinion that the amount of USD ....
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....ive impacts on the environment through strict compliance with ecological standards and indicators are also expected. The interventions will focus on forest-based livelihood, leveraging the existing knowledge, and experience, along with the partner institutions (Keystone Foundation and APPCL), and strengthen key "satellite" units that are part of the enterprise network for the NBR. KF is a not-for-profit trust established in November 1993, based in Nilgiris district of Tamil Nadu, with Conservation, Enterprise & Livelihoods as its central pillars. It has incubated two social marketing organizations-APPCL that looks at production and procurement at the village level, and LFE that focuses on marketing of agro and forest based, fair trade products. 7.18 On perusal of the description of the investment as mentioned in the Grant Agreement we find that the purpose of the investment is .to help the applicant company overcome the losses due to lack of capital, slowing down and stopping of cash flows and collapsing of the distribution network due to the pandemic lockdown and the activities to be undertaken by the applicant are towards strengthening the local green enterprise for s....