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2018 (7) TMI 389 - AAR - GSTLevy of IGST - Concessional rate of tax - supply of goods to specified institutions - Is the concessional tax rate of 5% as given under Notification No. 47/2017 dated 14.11.2017 is applicable only for Interstate sales i.e., on IGST or also applicable for sales within the state i.e., on SGST & CGST? If this concessional tax rate of 5% is applicable for both Interstate and within the state sales, then can we avail the Input tax credit (ITC) for the raw materials used for these supplies? Held that - In respect of such clearances effected within the State, Govt. of India vide Notification No. 45/2017-Central Tax (Rate) dated 14.11.2017 which exempts the goods specified in column (3) of the Table, from the so much of the central tax leviable thereon under section 9 of the said Act, as in excess of the amount calculated at the rate of 2.5 per cent., when supplied to the institutions specified in the corresponding entry in column (2) of the Table, subject to the conditions specified in the corresponding entry in column (4) of the said table given in the notification. The total tax payable under GST in respect of such clearances effected within the state is 5% (2.5% CGST 2.5% SGST). Input tax credit - Section 17 (5) of the Central Goods & Services Tax Act, 2017 - Held that - Section 17 (5) of the Central Goods & Services Tax Act, 2017 (which is reproduced hereunder for the ease of reference) has clearly mentioned the list of goods and services on which input tax credit is not allowed - However, goods and services on which concessional rate of tax is applicable are not figured in the list. Hence, the ITC is allowed on the supplies effected by paying duty at concessional rate of tax. Moreover, the supplies effected at concessional rate of duty are not exempt supplies. Hence, Input tax credit is allowable on the raw materials used for these supplies. Ruling - The concessional rate of tax @ 5% as given under Notification No. 47/2017- Integrated Tax (Rate) dated 14.11.2017 is applicable only for Interstate sales i.e., on IGST and concessional rate of tax @ 2.5% CGST 2.5% SGST is applicable for Intrastate supplies as per Notification No. 45/2017-Central Tax (Rate) dated 14.11.2017. Input tax credit is available on the raw materials used for the supplies made under concessional rate of tax.
Issues:
1. Applicability of concessional tax rate under Notification No. 47/2017 for Interstate and Intrastate sales. 2. Availability of Input Tax Credit (ITC) for raw materials used in supplies under concessional tax rate. Analysis: 1. The applicant sought clarification on the applicability of the concessional tax rate of 5% under Notification No. 47/2017 for both Interstate (IGST) and Intrastate (SGST & CGST) sales. The Authority referred to the relevant notifications stating that goods supplied to specified institutions are eligible for a concessional tax rate subject to conditions. For Interstate sales, the rate is 5%, and for Intrastate supplies, it is 2.5% CGST + 2.5% SGST as per Notification No. 45/2017-Central Tax (Rate) dated 14.11.2017. 2. Regarding the availability of Input Tax Credit for raw materials used in supplies under the concessional tax rate, the Authority highlighted Section 17(5) of the Central Goods & Services Tax Act, 2017, which specifies goods and services where ITC is not allowed. However, since goods and services under concessional tax rates are not listed in the restricted categories, ITC is permissible for supplies made at concessional rates. Such supplies are not considered exempt supplies, making ITC allowable on raw materials used for these transactions. Conclusion: The Authority ruled that the concessional tax rate of 5% under Notification No. 47/2017 is applicable for Interstate sales (IGST) and 2.5% CGST + 2.5% SGST for Intrastate supplies as per Notification No. 45/2017. Additionally, Input Tax Credit is available for raw materials used in supplies made under the concessional tax rates specified in the notifications. The application filed by the applicant was disposed of accordingly.
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