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TMI Blog2019 (3) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... to time and value of supply is covered under Section 20, hence the rules made under CGST Act in relation to valuation of a supply is applicable to IGST Act as well. Rule 32(5) of the CGST Rules, 2017 which provides for Margin Scheme in case of intra-state supplies shall also be applicable in case of inter-state supplies and the applicant is entitled to make inter-state supplies of used lead acid batteries while operating under the Margin Scheme. - AAR No. RAJ/AAR/2018-19/35 - - - Dated:- 15-2-2019 - SHRI J.P. MEENA AND SHRI HEMANT JAIN MEMBER Present for the applicant: Mr. Ramesh Agarwal, Director Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order. The issue raised by M/s. Shambhu Traders Private Limited situated at 41, Large Industrial Area, Kota, Rajasthan 324003 (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (e), which is given as under : e. determination of the liability to pay tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. The relevant extract of Section 32(5) of the CGST Rules, 2017 is reproduced below: (5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored: Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the used bottles shall squarely be applicable in respect of the used lead acid batteries as just like used bottles no processing is done on the used lead acid batteries. Therefore, in the Applicant s view, these used lead acid batteries qualify to be second hand goods. Accordingly, the Applicant dealer is entitled to operate under the Margin Scheme in respect of the used lead acid batteries. g. Applicant s interpretation with respect to second question:- When the Applicant is selling goods under the Margin Scheme notified under Rule 32(5) of the Central Goods and Service Tax Rules, 2017. The Tax on Outward Supply under the Margin Scheme would be qualified under which of the following heading in GSTR-3B a. As per Section 2(108) of the CGST Act - Taxable Supplies means a supply of goods or services or both which is leviable to tax under this act. Accordingly all the supply of goods and services except the following shall be taxable supply: Supply of Alcohol for human consumption since the Non taxable Supplies which shall include supplies whose place of supply is in non taxable territories It is pertinent to mention that Exempt supplies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When Applicant selling the goods outside the state? 3.1 Tax on Outward and reverse charge Inward Supplies Nature of Supplies Total Taxable Value (a) Outward taxable supplies (other than zero rated, nil rated and exempted) (b) Outward taxable supplies (zero rated) (c) Other Outward Supply (nil rated, exempted ) (d) Inward Supply (liable to reverse charge) (e) Non GST Outward Supply 3.2 Inter State Supply Nature of Supply Total Taxable Supply Supplies made to Unregistered Persons Supplies made to Composition Taxable Person Supplies made to UIN Holders 3. When the Applicant is operating under the Margin Scheme notified under Rule 32(5) of the Central Goods and Service Tax Rules, 2017 ( CGST Rules, 2017 ) by selling the used lead acid batteries to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person making such repossession. d. As provided in Rule 32(5) of the CGST Rules, 2017, the margin scheme is available in case of purchase and subsequent sale of second hand goods. In the present case, the Applicant is primarily engaged in the activity of procuring the second hand lead acid batteries (hereinafter referred to as batteries ) in small quantities (50 to 100 kg approx.) from various unregistered suppliers situated within the State of Rajasthan and outside Rajasthan. e. For goods to qualify as second hand goods as per Rule 32(5) of the CGST Rules, 2017 such goods need be (1) used goods as such or goods after minor processing that does not change the nature of goods (2) goods on which no Input Tax Credit has been availed. f. It is observed that used lead acid batteries are used goods and no processing is done on such goods. Therefore, these used lead acid batteries qualify as second hand goods, further, the Applicant does not avail Input Tax Credit on such used lead acid batteries. Therefore, we find that, the used lead acid batteries qualify to be second hand goods. Accordingly, the Applicant dealer is entitled to operate under the Margin Scheme in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix) appeals and revision; (xx) presumption as to documents; (xxi) offences and penalties; (xxii) job work; (xxiii) electronic commerce; (xxiv) transitional provisions; and (xxv) miscellaneous provisions including the provisions relating to the imposition of interest and penalty, shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act: The subject pertaining to time and value of supply is covered under Section 20, hence the rules made under CGST Act in relation to valuation of a supply is applicable to IGST Act as well. In accordance with the above facts of law, we find that, Rule 32(5) of the CGST Rules, 2017 which provides for Margin Scheme in case of intra-state supplies shall also be applicable in case of inter-state supplies and the applicant is entitled to make inter-state supplies of used lead acid batteries while operating under the Margin Scheme. 6. In view of the foregoing, we rule as follows:- RULING 1. The used lead acid batteries qualify to be second hand goods. Accordingly, the Applicant dealer is entitled to o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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