2022 (1) TMI 150 - AAAR - GST

Liability of GST - reimbursement of Employee Provident Fund ESI - Inclusion in the value of supply as per section 15 of the CGST Act, 2017 or not - taxable at @18% or otherwise? - HELD THAT - The appellant is a recipient of services in the subject case. The impugned transactions are not in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the appellant and therefore, it is outside the purview of mandate given to Advance Ruling Authority/AppeIIate Authority on Advance Ruling. The subject application cannot be admitted as per the provisions of Section 95 of the CGST Act and should have been rejected ab-initio by the Advance Ruling Authority. The present appeal is rejected, as being non- maintainable as per the provision of law.

Summary

Issues:
1. Appeal against Advance Ruling Order on GST liability for reimbursement of EPF and ESI contributions.

Detailed Analysis:

1. Background and Appeal: The appeal was filed by M/s. Lucknow Producers Cooprative Milk Union Ltd against the Advance Ruling Order No. UP ADRG 76/2021, seeking clarification on the GST liability for reimbursement of EPF and ESI contributions. The Appellant disagreed with the ruling and challenged it before the Appellate Authority.

2. Contentions of the Appellant: The Appellant raised several grounds for appeal, including the alleged failure of the Advance Ruling Authority to consider a similar ruling by the Karnataka Advance Ruling Authority. The Appellant argued that the reimbursement of EPF and ESI contributions should not attract GST as it fulfills the requirements of Rule 33 of GST Rules.

3. Discussion and Finding: The Appellate Authority examined the submissions and determined that the appellant is not covered under the reverse charge mechanism but pays the entire tax to the service provider. It was concluded that the impugned transactions do not pertain to the supply of goods or services by the appellant. Therefore, the Authority found the appeal to be non-maintainable under Section 95 of the CGST Act and rejected it without discussing the merits of the case.

4. Order: The Appellate Authority, after considering the arguments and findings, issued an order rejecting the appeal as non-maintainable under the provisions of the law.

In summary, the Appellate Authority dismissed the appeal filed by M/s. Lucknow Producers Cooprative Milk Union Ltd against the Advance Ruling Order regarding the GST liability for reimbursement of EPF and ESI contributions. The Authority found the appeal non-maintainable as the transactions in question were not related to the supply of goods or services by the appellant, leading to the rejection of the appeal without delving into the merits of the case.