2018 (8) TMI 977 - AAAR - GST

Input tax credit - purchase of motor vehicles i.e. cash carry vans - cash management network pan India - purchase of motor vehicles i.e. cash carry vans, which are purchased and used for cash management business and supplied post usage as scrap - whether the money being transported by the Appellant in the cash carry vans is goods or otherwise for the purposes of availing Input Tax Credit under the GST law? - Held that - Held that - The argument of the Appellant that, although in general understanding, what is being transported by the appellants is currency or cash or money, from the Appellant's point of view or for the appellant, what is transported is 'goods' and not 'money', does not support their cause, as the definitions provided in Acts are universal and same cannot be interpreted for suiting the requirement of any individual as claimed by the Appellant. If 'Money' is not covered as 'Goods' in the definition of 'Goods' under CGST Act, then it is not 'goods' for everyone and it cannot be said that it is not 'goods' for general perception and it is 'goods' for the Appellant. Ruling - Input Tax Credit is not available to CMS Info Systems Limited on purchase of motor vehicles i.e. cash carry vans, which are purchased and used for cash management business and supplied post usage as scrap.

Issues Involved:
1. Whether the supply of motor vehicles as scrap after usage can be treated as supply in the course or furtherance of business and whether such transaction would attract GST.
2. Whether Input Tax Credit (ITC) is available on the purchase of motor vehicles (cash carry vans) used for cash management business and supplied post usage as scrap.

Issue-wise Detailed Analysis:

1. Supply of Motor Vehicles as Scrap and GST Applicability:

The Appellate Authority addressed whether the supply of motor vehicles as scrap after their usage qualifies as a supply in the course or furtherance of business and whether such transactions attract GST. The Authority for Advance Ruling (AAR) had previously determined that the disposal of cash carry vans as scrap is a transaction incidental to business, thereby attracting GST. However, the rate of GST could not be specified due to the lack of specific details regarding the condition of the vehicles post-sale.

2. Input Tax Credit (ITC) on Purchase of Motor Vehicles:

The primary contention was whether ITC is available on the purchase of motor vehicles (cash carry vans) used for cash management and later sold as scrap. The appellant argued that they are entitled to ITC on the GST paid for both the purchase and fabrication of these vehicles, citing Section 17(5)(a) of the CGST Act, which allows ITC for motor vehicles used for the transportation of goods. They contended that the currency transported should be considered "goods" and not "money" as defined under Section 2(52) and Section 2(75) of the CGST Act.

Arguments by the Appellant:

1. Transportation of Goods: The appellant argued that the currency transported is for business purposes and should be considered as "goods" since it is not used as a consideration to settle obligations but merely transported.

2. Motor Vehicle Act Definitions: They referred to definitions under the Motor Vehicle Act, 1988, which classify currency as "goods," thereby supporting their claim for ITC.

3. Legal Precedents: The appellant cited various judgments to support their claim that the definition of "goods" should be interpreted in a manner that includes currency transported for business purposes.

Arguments by the Respondent:

1. Definition of Goods: The respondent emphasized that under Section 2(52) of the CGST Act, "goods" explicitly exclude money. Therefore, currency cannot be considered "goods" for the purpose of availing ITC.

2. Special Purpose Vehicles: The respondent highlighted that cash carry vans are special purpose vehicles used under strict guidelines by the Reserve Bank of India, which differentiates them from ordinary goods transportation vehicles.

Findings and Discussion:

1. Definition of Goods: The Appellate Authority observed that the definition of "goods" under Section 2(52) of the CGST Act clearly excludes money. The definition of "money" under Section 2(75) includes Indian legal tender unless held for numismatic value. The cash transported by the appellant is considered money and not goods.

2. GST Council Recommendations: The Authority noted a recent recommendation by the GST Council to widen the scope of ITC to include motor vehicles used for transporting money by banking companies or financial institutions. This recommendation indicates that the legislature did not initially intend to treat money as goods under the current GST provisions.

3. Legal Precedents and Context: The Authority distinguished the cited judgments, noting that the current context and definitions under the CGST Act do not warrant a different interpretation of "goods." The definitions provided are clear and do not support the appellant's claim that currency transported should be considered goods.

Conclusion:

The Appellate Authority concluded that, as per the current provisions of the CGST Act, Input Tax Credit is not available to the appellant on the purchase of motor vehicles used for cash management business and supplied post usage as scrap. The issue referred to the appellate authority was decided accordingly, upholding the view that currency transported in cash carry vans does not qualify as "goods" for the purpose of availing ITC.

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