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2020 (3) TMI 1331 - AAR - GSTLevy of GSply of goods services by way of catering to students of Govt. Industrial Training Institute, Kalamassery as per the Govt. Scheme for ₹ 12.40/- per student per day - requirement of GST registration - applicability of TDS under Section 51 of the GST Act - refund of GST is eligible in the case of TDS deducted and paid - HELD THAT - The supply made by the applicant falls under Service Classification Code - 9963 - 996337 - Other contract food services - as per the Scheme of Classification of Services notified as Annexure to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 - As per the Explanatory Notes to the Scheme of Classification of Services this service code includes food preparation and /or supply services based on contractual arrangements with the customer, at institutional, governmental, commercial or industrial locations specified by the customer other than for transportation companies, on an ongoing basis; food service concession services, i.e. the provision of operating services by operators of eating facilities such as canteens and cafeterias. The exemption to catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; provided to an educational institution as per Sl. No. 66 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 is not applicable to institutions other than institutions providing services by way of pre-school education and education up to higher secondary school or equivalent. As per the details of the academic qualifications prescribed for admission to the courses conducted by the ITI, the institute can be classified as an institution providing services by way of education up to higher secondary school or equivalent. As the exemption to catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; provided to an educational institution as per Si No. 66 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 is applicable to the institutions providing services by way of education up to higher secondary school or equivalent, the catering services to the trainees in the Industrial Training Institute is eligible for exemption from GST. Requirement of GST registration - HELD THAT - As per Section 22 of the CGST/SGST Act, 2017; every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees. Section 23 (1) of the CGST Act, 2017 stipulates that any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax shall not be liable to registration. In view of the provisions of Section 23 of the CGST Act, 2017, the applicant is not liable to registration if the applicant is exclusively engaged in the supply of goods / services. Applicability of TDS under Section 51 of the GST Act - HELD THAT - As per Section 51 of the CGST/SGST Act, 2017 a department or establishment of the State Government shall be liable to deduct tax at the rate of two per cent from the payment made or credited to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees. As the activity of the applicant is exempted from GST the provisions of TDS is not attracted. Refund of GST is eligible in the case of TDS deducted and paid - HELD THAT - The amount deducted as TDS will be credited to the Electronic Cash Ledger of the applicant on filing of TDS returns by the Deductor as the applicant is registered. Since the supply made by the applicant is exempted from GST, the applicant can claim refund of the excess balance in the Electronic Cash Ledger as per provisions of Section 54 of the CGST Act, 2017.
Issues:
1. Liability of GST on supply of goods and services by way of catering to students of Government Industrial Training Institute. 2. Requirement of GST registration for the supply of goods and services. 3. Applicability of TDS under Section 51 of the GST Act on the supply of goods and services. 4. Eligibility for refund of GST in case of TDS deducted and paid under Section 51 of the GST Act. Issue 1: Liability of GST on supply of goods and services by way of catering to students of Government Industrial Training Institute: The petitioner sought an advance ruling on whether the supply of specific goods and services to students under a government scheme attracts GST. The goods included boiled milk without sugar, fresh banana, bread, and cooked egg with shell. The Authority examined the classification of the supply as a service under the CGST Act, determining it to fall under Service Classification Code - 9963 - Other contract food services. The exemption under Notification No. 12/2017 Central Tax (Rate) was analyzed, concluding that the exemption for catering services to educational institutions applies to those providing services up to higher secondary level. The Industrial Training Institute was deemed to fall under this category, making the supply eligible for exemption from GST. Issue 2: Requirement of GST registration for the supply of goods and services: Regarding the necessity of GST registration for the supply of the aforementioned goods and services, the Authority referred to Section 22 and Section 23 of the CGST Act. It was determined that if the supplier is exclusively engaged in supplying goods or services that are not taxable or wholly exempt from tax, registration is not mandatory. Therefore, in this case, where the applicant's supply of goods and services qualifies for GST exemption, registration is not required. Issue 3: Applicability of TDS under Section 51 of the GST Act on the supply of goods and services: The judgment addressed the applicability of Tax Deducted at Source (TDS) under Section 51 of the GST Act. It was clarified that a department or establishment of the State Government must deduct tax at a specified rate from payments exceeding a certain threshold. However, as the supply in question was exempted from GST, the provisions of TDS were deemed not applicable in this scenario. Issue 4: Eligibility for refund of GST in case of TDS deducted and paid under Section 51 of the GST Act: In the event of TDS being deducted and paid under Section 51 of the GST Act, the judgment explained that the amount deducted would be credited to the Electronic Cash Ledger of the applicant upon filing of TDS returns. Since the supply was exempted from GST, the applicant could claim a refund of any excess balance in the Electronic Cash Ledger as per the provisions of Section 54 of the CGST Act, 2017. This detailed analysis of the judgment provides a comprehensive overview of the issues raised and the Authority's rulings on each matter concerning the liability of GST, registration requirements, TDS applicability, and eligibility for GST refunds in the context of the supply of goods and services to students of a Government Industrial Training Institute.
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