TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 427
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....resentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s KARTHIK & CO, No. 133, Dharapuram Road, Tiruppur - 641604. (hereinafter called as the "Applicant") are registered under the GST Act with GSTIN 33AAGFK0960K1ZD. The applicant has sought advance ruling on the following question: 1. Whether the TAX INVOICE raised by us for the non-monetary benefits/ perquisites received is valid under GST Act? 2. Whether value on which TDS deducted under section 194R of Income Tax Act should be considered as SUPPLY? 3. If the same termed as SUPPLY, then let us know whether it is being construed as supply through any Notification or under any section of GST Act? The Applicant has made a paym....
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....sentative of the applicant appeared for the personal hearing. AR reiterated the submissions made in their application for advance ruling. AR further explained that the applicant is a dealer and distributer of paints and paint related products for several paint manufacturers. The paint manufacturers provide them non-monetary considerations such as gifts, complements, tour packages etc. The paint manufacturers deduct TDS under section 194R of the income Tax for the above non-monetary consideration given to the applicant (dealer/distributor). 8. AR stated that the manufacturers claim that the said supply would neither fall under supply of goods nor services. AR sought whether the said supply attracts GST. The members requested AR certain documents and details which may be useful for making a decision. AR informed that he will ascertain all the clarification relating to the issue from the applicant and submit all the details asked by members within a week's time along with a short write-up and documentary evidences whatever available with the applicant. Discussions and Findings: 9. We have carefully considered the facts and submissions made by the applicant in their applic....
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.... non-cash incentives to promote business, such as free products, trips, or other perks. Section 194R mandates a supplier to deduct 10% TDS on any benefit or perquisite provided to a resident business or professional if the value exceeds Rs.20,000 in a financial year. From a GST perspective, this transaction can be interpreted as a service provided by the recipient (e.g., promotional services) in exchange for the perquisite received from the supplier. This transaction can be interpreted as a service provided by the recipient (e.g., promotional services) in exchange for the perquisite received from the supplier under GST. 13. The manufacturer is supplying goods namely, Paints to the applicant (distributor). The applicant in turn supplies the same in wholesale or retail to the contractors or individuals (painters). The manufacturer is providing non-monetary consideration to the applicant in the form of free gift, perquisites tour packages etc. and deduct TDS on the same. 14. The applicant informed that they have not entered into any form of agreement with any of the manufacturers who provide them the free gift, perquisites and tour packages. The transaction between the manufactu....
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....sponse 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; From the above definition, it is clear that consideration can be in money or otherwise also. In the instant case, benefit is flowing from Manufacturer to the applicant in the form of free gift/Tour package etc., that is not in money but in kind. There has to be quad pro quo, consideration should flow from the applicant to the manufacturer also. The applicant is providing supply of 'augmentation of sales' for the manufacturer. So, it is clear from a....
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.... providing supply of augmentation/promotion /business support of sales to the Manufacturer in the form of desired action/target achieved as per the expectations of the manufacturer. Therefore, the applicant is the supplier and the manufacturer is the recipient. Accordingly, the applicant shall be the taxable person who shall charge tax over this transaction. Hence, the applicant should raise invoice for this on the manufacturer. 23. The consideration for the taxable supply is not wholly in money. So value cannot be determined as per Sec 15 of the Act. To determine the value of taxable supply, Rule 27 comes into play. Rule 27. Value of supply of goods or services where the consideration is not wholly in money. - Where the supply of goods or services is for a consideration not wholly in money, the value of the supply shall,- (a) be the open market value of such supply; (b) if the open market value is not available under clause (a), be the sum total of consideration in money and any such further amount in money as is equivalent to the consideration not in money, if such amount is known at the time of supply; (c) if the value of supply is....