2019 (11) TMI 714 - AAR - GST

Exemption from GST - Supply of biscuits, soaps etc. earmarked FOR PDS SUPPLY ONLY to fair price shops/PDS distributors - N/N. 2/2017 - CT (Rate) dated 28/06/2017 - HELD THAT - Supply of goods through PDS is not exempt under Notification No. 2/2017 - CT (Rate) dated 28/06/2017, as amended from time to time (reference to which includes reference to State Notification No. 1126 - FT dated 28/06/2017) or any other notification. Activities or transactions of the Applicant are not included in Schedule III either. The Applicant is, therefore, liable to pay GST at the applicable rate on his supplies of goods through PDS.

Summary

Issues:
1. Admissibility of the Application
2. Submissions of the Applicant
3. Submissions of the Revenue
4. Observations & Findings of the Authority

Admissibility of the Application:
The Applicant sought a ruling on the liability to pay GST on supplies of consumer goods earmarked 'FOR PDS SUPPLY ONLY.' The question raised was deemed admissible under section 97(e) of the GST Act as it was not decided by any authority. The Application was admitted for further consideration.

Submissions of the Applicant:
The Applicant, acting as an associate of a government corporation, supplied goods to fair price shops/PDS distributors against a fixed monthly administrative charge. The Applicant bore all costs and risks associated with the supplies, acting as a canalising agency on behalf of the government entity. Despite arguing for GST exemption on PDS supplies, the Applicant provided no legal basis or notification in support of the claim.

Submissions of the Revenue:
The Revenue officer did not comment on the sustainability of the Applicant's argument regarding GST exemption for supplies through PDS.

Observations & Findings of the Authority:
The Authority noted that supplies through PDS were not exempt under relevant notifications or Schedule III of the GST Act. As such, the Applicant was held liable to pay GST at the applicable rate on goods supplied through PDS. The ruling declared the Applicant's liability for GST on such supplies, subject to the provisions of the GST Act.

This judgment clarifies the tax liability of the Applicant for supplies of goods earmarked for PDS distribution, emphasizing the absence of GST exemption for such transactions under the prevailing notifications and regulations.