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2024 (2) TMI 1060 - AAR - GSTIndustrial consumer or institutional consumer? - Trading of Food grains, Sugars, Edible Oils etc. (unbranded) - Levy of GST on goods supplied by the applicant through the Nodal Agency - Hyderabad Agricultural Co-operative Association Limited (HACA) - HELD THAT - The Department for Women, Children, Disabled Senior Citizens in September 2022 has floated a tender for supply of Red Gram Dal Procurement through HACA who are nominated as nodal agency vide G.O. RT No. 69 dated 07/04/2017. The supply of Red Gram is meant for all the ICDS projects in the state. The HACA will call for tenders on behalf of the Women Dev. Child Welfare Dept., for the supply of Red Gram Dall. HACA is an agency to provide service for the proper qualitative and timely supply of Red Gram Dall to above Department as per their norms/requirements. Thus HACA is an agent on behalf of The Department for Women, Children, Disabled Senior Citizens who is the principal who as nominated HACA as a nodal agency for the specific purpose of calling for tenders on behalf of the principal and ensure proper qualitative and timely supply of Red Gram Dall. The Department for Women, Children, Disabled Senior Citizens of the State of Telangana is buying packaged commodities, directly from the manufacturer or from wholesale dealers for use by that institution and not for commercial or trade purpose. Therefore the said department will qualify to be an institutional consumer as long as the following conditions are fulfilled i. The packaged commodities are bearing a declaration not for retail sale , ii. The purchase is made directly from the manufacturer or from an importer or from wholesale dealer, iii. The purchase is made for use by that institution and not for commercial or trade purpose. The supplies made by the applicant will be exempt from CGST SGST if made to the institutional consumer who is satisfying the above conditions.
Issues involved:
The judgment involves the interpretation of the GST Act regarding the classification of commodities and the applicability of GST on goods supplied through a Nodal Agency. Issue 1 - Classification of Commodities: The applicant sought clarification on whether the Department for Women, Children, Disabled & Senior Citizens qualifies as an "industrial consumer or institutional consumer." The judgment ruled that the department can be considered an institutional consumer if specific conditions are met, such as the commodities being labeled "not for retail sale" and purchased directly from manufacturers or wholesale dealers for institutional use. Issue 2 - Applicability of GST on Goods Supplied through Nodal Agency: The applicant inquired whether the goods supplied through the Nodal Agency, Hyderabad Agricultural Co-operative Association Limited (HACA), are subject to GST. The judgment concluded that if the supplied commodities meet certain criteria, including being labeled "not for retail sale" and intended for institutional use without commercial or trade purposes, then no GST is applicable on such supplies.
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