2018 (7) TMI 756 - AAR - GST

Valuation - Trade Discount - Whether the amount paid to dealer towards rate difference post supply can be considered for the purpose of arriving at the transaction value in terms of Section 15 of the Central Goods and Service Act 2017? The Applicant requested to permit them to withdraw the application filed for advance ruling vide their letter dated 29.05.2018, even prior to personal hearing - Held that - The application filed by the Applicant for advance ruling is dismissed as withdrawn.

Summary

Issues involved:
- Application for advance ruling under Section 97 of CGST Act, 2017, KGST Act, 2017 & IGST Act, 2017
- Consideration of 'rate difference' post supply for arriving at the 'transaction value' under Section 15 of the CGST Act, 2017

Analysis:

1. Application for Advance Ruling:
The case involved an application for advance ruling filed by M/s UltraTech Cement Limited, seeking clarification under Section 97 of the CGST Act, 2017, KGST Act, 2017, and IGST Act, 2017. The Applicant, engaged in the manufacture and supply of cement and clinker, inquired about the treatment of the amount paid to dealers as 'rate difference' post supply. The application was accompanied by the necessary documents and fees, indicating a formal request for clarification on a specific tax-related issue.

2. Consideration of 'Rate Difference' for Transaction Value:
The primary issue raised in the application was whether the amount paid to dealers as 'rate difference' post supply could be considered for determining the 'transaction value' as per Section 15 of the CGST Act, 2017. The Applicant highlighted the scenario where dealers sold goods at prices lower than their cost price due to dynamic market conditions, resulting in the Applicant paying a 'rate difference' or trade discount. The request for advance ruling sought clarity on the inclusion of this 'rate difference' in the transaction value calculation, indicating a crucial aspect of tax liability determination in supply transactions.

3. Ruling and Dismissal:
The Authority for Advance Ruling, after considering the application and the request for withdrawal made by the Applicant prior to the personal hearing, issued a ruling dismissing the application as withdrawn. This ruling signifies the closure of the advance ruling process without providing a specific decision on the tax treatment of the 'rate difference' in the transaction value calculation. The dismissal indicates that the Authority did not delve into the substantive issue raised by the Applicant, as the withdrawal of the application precluded a detailed examination and determination by the Authority.

In conclusion, the judgment reflects the procedural aspect of advance ruling applications and the authority's response to the Applicant's request for withdrawal. The dismissal of the application without a substantive ruling leaves the specific tax treatment of 'rate difference' post supply for determining the transaction value unresolved, emphasizing the importance of formal applications and procedural adherence in seeking tax clarifications through advance rulings.