2018 (9) TMI 1338 - AAR - GST

Application for withdrawal of Advance Ruling application - Valuation - includibility - Whether amortization of value of free tools/ dies received form customer to be included for valuation of goods or not? - If the GST is applicable on the amortized value, what is the procedure for calculating the GST and reflecting the same in GST invoice format? - How to declare the transactions in GSTR-1 & GSTR -3 and GSTR-3B. Held that - As the query is clarified by CBIC, they requested that the application be treated as withdrawn. The application filed by the Applicant for advance ruling is dismissed as withdrawn.

Summary

Issues:
1. Valuation of goods - Amortization of value of free tools/dies received from the customer.
2. Applicability of GST on amortized value and procedure for calculating GST.
3. Declaration of transactions in GSTR-1, GSTR-3, and GSTR-3B.

Analysis:

Valuation of Goods - Amortization of Value of Free Tools/Dies:
The Applicant, engaged in automobile parts production, sought an advance ruling on whether the amortization of the value of free tools/dies received from customers should be included in the valuation of goods. They highlighted the practice of amortization under Central Excise regulations and the lack of similar provisions under GST. The ruling authority considered the absence of specific provisions under GST and the Applicant's query regarding the applicability of amortization provisions. However, the Applicant later referred to a circular issued by CBIC that clarified aspects related to amortization and the liability of GST on free usage of tools owned by OEMs. Consequently, the Applicant requested the withdrawal of the application, leading to its dismissal as withdrawn.

Applicability of GST on Amortized Value and Procedure for Calculating GST:
The Applicant also sought clarity on the applicability of GST on the amortized value of tools/dies and the procedure for calculating and reflecting GST in the invoice format. Despite the initial application and subsequent interactions with the ruling authority, including the submission of documents and representations by the Applicant's Authorized Representative, the application was eventually dismissed as withdrawn based on the Applicant's request following the issuance of a clarifying circular by CBIC on the subject matter.

Declaration of Transactions in GSTR-1, GSTR-3, and GSTR-3B:
Additionally, the Applicant inquired about how to declare transactions involving the amortized value of tools/dies in GSTR-1, GSTR-3, and GSTR-3B. The ruling authority's decision to dismiss the application as withdrawn did not allow for a specific ruling or guidance on this aspect. The Applicant's decision to withdraw the application following the issuance of a clarifying circular by CBIC impacted the ruling process, leading to the dismissal of the advance ruling application without a detailed examination of the declaration process in GST returns.

In conclusion, the ruling authority's decision to dismiss the advance ruling application as withdrawn due to the Applicant's request following the issuance of a clarifying circular by CBIC prevented a detailed ruling on the valuation, GST applicability, and declaration of transactions related to the amortization of tools/dies received from customers in the context of GST regulations.