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2019 (10) TMI 947 - AAR - GSTConcessional rate of tax - supply of trucks and its spare parts to Public Funded Research Institutions - Applicability of N/N. 45/2017 - Central Tax (Rate) dated November 14th, 2017 - HELD THAT - The applicant intends to supply trucks and spare parts of automobiles to various research institutions - Notification No. 45/2017 - Central Tax (Rate) dated 14.11.2017 exempts specified goods from so much of the central tax leviable thereon under section 9 of the said Act, as is in excess of the amount calculated at the rate of 2.5% when supplied to the institutions specified, subject to the conditions specified in the corresponding entry. The applicant has received orders from Satish Dhawan Space Centre SHAR (SDSC SHAR) for supply of trucks and order from Electronics Radar Development Establishment (LRDE) for supply of spare parts for trucks. The applicant has also submitted a copy of Exemption Certificate issued by the SDSC SHAR wherein the competent officer has certified that SDSC SHAR is a public funded research institution. Similarly the Electronics 8 Radar Development Establishment (LRDE) has also provided the necessary exemption certificate from the competent authority. These facts indicate that the first condition is satisfied in the instant case. Notification No. 45/2017-Central Tax(Rate) dated November 14, 2017 is applicable on supply of trucks and its spare parts to Public funded research institutions - The submissions of the applicant regarding the nature of the other recipients needs to be verified with reference to the research activity done and also whether they are recognised as a Public Funded Research Organisation and some of the companies to which the applicant intends to supply may not be covered under the term Research Organisation like Bharat Electronics Ltd,. Bharat Heavy Electricals Ltd., Hindustan Aeronautics Ltd. The supply of trucks and spare parts by the applicant to Satish Dhawan Space Centre (SHAR), (SDSC SHAR) and Electronics Radar Development Establishment (LRDE) respectively, as specified in the application, are covered under the description of goods specified in Notification No. 45/2017 - Central Tax (Rate) dated 14.11.2017 and hence are eligible for a reduced rate of tax under the CGST Act and similarly under KGST Act and IGST Acts.
Issues Involved:
1. Applicability of Notification No. 45/2017 - Central Tax (Rate) dated November 14, 2017 on the supply of trucks and spare parts to Public Funded Research Institutions. 2. Verification of the nature of recipients as Public Funded Research Institutions. 3. Compliance with the conditions specified in the Notification No. 45/2017. Issue-wise Detailed Analysis: 1. Applicability of Notification No. 45/2017 - Central Tax (Rate) dated November 14, 2017: The applicant, a Limited Company engaged in manufacturing and selling commercial vehicles, sought an advance ruling on whether the concessional rate of 5% GST under Notification No. 45/2017 - Central Tax (Rate) dated November 14, 2017, applies to the supply of trucks and spare parts to Public Funded Research Institutions. The applicant received orders from Satish Dhawan Space Centre (SHAR) and Electronics & Radar Development Establishment (LRDE) for trucks and spare parts, respectively. The applicant argued that these goods would be used for transporting research and development equipment across test sites, thus qualifying them under the specified goods in the Notification. 2. Verification of the Nature of Recipients as Public Funded Research Institutions: The applicant provided exemption certificates from SDSC SHAR and LRDE, certifying them as Public Funded Research Institutions. The Authority examined these certificates and confirmed that the first condition of the Notification, which requires the recipient to be a Public Funded Research Institution, was satisfied. 3. Compliance with the Conditions Specified in the Notification No. 45/2017: The Notification No. 45/2017 specifies that the concessional rate of 5% GST applies to certain goods supplied to Public Funded Research Institutions, provided specific conditions are met. These conditions include: - The goods must be scientific and technical instruments, apparatus, equipment (including computers), accessories, parts, consumables, and live animals (experimental purpose). - The Public Funded Research Institution must produce a certificate from an officer not below the rank of Deputy Secretary to the Government of India or the State Government at the time of supply. The Authority examined whether trucks and spare parts could be considered as scientific and technical instruments, apparatus, or equipment. It was concluded that while trucks may not be scientific instruments, they qualify as apparatus/equipment necessary for research purposes, as they are used to transport research equipment across test sites. The applicant fulfilled both conditions: the supply was made to a Public Funded Research Institution, and the institution provided the necessary certificates. The Authority noted that the term "required for research purposes" is expansive and includes equipment necessary for the overall research activity, such as trucks for transporting research instruments. Additional Considerations: The Authority referenced previous judgments, such as the case of PL Haulwel Trailers Vs Commissioner of Central Excise Chennai, which supported the view that as long as a certificate is issued by the designated officer, the benefit of the Notification cannot be denied. The Authority also noted that some intended recipients like Bharat Electronics Ltd., Bharat Heavy Electricals Ltd., and Hindustan Aeronautics Ltd. might not qualify as Public Funded Research Institutions and would need further verification. Conclusion: The Authority ruled that the supply of trucks and spare parts by the applicant to SDSC SHAR and LRDE is covered under the description of goods specified in Notification No. 45/2017 - Central Tax (Rate) dated November 14, 2017, and is eligible for a reduced rate of tax under the CGST Act, KGST Act, and IGST Acts. The view of the revenue office, which opposed this interpretation, was not accepted.
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