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TMI Blog2019 (4) TMI 1497X X X X Extracts X X X X X X X X Extracts X X X X ..... ame for further supply to a buyer/ purchaser (as directed by the Principal i.e. NAFED), therefore, this activity is a supply of goods in terms of Schedule I of the Central Goods and Services Tax Act, 2017, and attracts GST as applicable (the supply of goods by an agent on behalf of the principal without consideration has been deemed to be a supply). Levy of GST - outward Supply of pulses (without any brand name) - HELD THAT:- The applicant is not liable for charging RGST/CGST or IGST on outward supply of pulses (without any brand name) through Krah Vikrah, Sahakari Samiti as the same is exempted under Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017 in accordance to section 11 (1) of CGST Act, 2017. Levy of GST - outward Supply of oilseeds (other than of seed quality) - HELD THAT:- The applicant is liable for charging RGST/CGST or IGST on outward supplies of oilseeds (other than of seed quality) made through Krah Vikrah, Sahakari Sarniti and the same attracts GST@50/0 (SGST 2.5% + CGST 2.5%) under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 in accordance to section 1 1 (1) of CGST Act, 2017. Deduction of TDS from payment to or credit of KrahVik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. 1. SUBMISSION AND INTERPRETATION OF THE APPLICANT: a. The applicant is a co-operative society registered under the Rajasthan Co-operative Societies Act, 1953, (Now 2001 and has it's office at Bhawani Singh Road, 'C'-scheme, Jaipur, and is a registered taxable person under the Rajasthan Goods and Service Tax Act, 2017, and Central Goods and Service Tax Act, 2017 vide GSTIN No. is 08AAAAR0279B1ZU. b. That, the applicant deals in trading in various items and providing services as commission agent to other registered Taxable persons. c. That, the applicant carries it s business activity of providing services to agriculturist for buying their agriculture produce and selling those produces in the open market. d. That, the applicant also helps to the National Agriculture Co-Operative Marketing federation of India Ltd., (NAFED) for procuring agriculture produce from farmers and supply them as per their instructions i.e. NAFED for implementation of Government po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Samiti to the farmers. l. That, on procurement/ purchases of gunny bags by NAFED under instruction of the applicant, the applicant make payment to the NAFED and the final payment is made by the NAFED to the sellers. m. That, the Government of India as well as the State Government of Rajasthan both of them have notified through their notification numbers 50/2018 - Central Tax Dated: 13 th September, 2018, and F.12(46)FD/Tax/2017-Pt.-113 dated 13/09/2018 respectively about to deduct tax at source (TDS) on payments or credit on supply of goods as well as service or both on contract to contractors according to section 51 of both the Acts i.e. CGST/RGST, for your ready reference both of them are reproduced hereunder:- Section 51 of the CGST Act:- 51.(1) Notwithstanding anything to the contrary contained in this Act, the Government may mandate,- (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of persons as maybe notified by the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or credit of KrahVikrah, Sahakari Samiti/RAJFED under Notification No. 50/2018-central tax dated 13.09.2018 for their services of procurement of oilseeds and pulses for the applicant to be supplied by the applicant to its principal NAFED. d. Whether the applicant being a Co-Operative society registered under the Rajasthan State Co-Operative Society Act, 1953 now consolidated in the Rajasthan Co-Operative Societies Act, 2001 is liable to deduct Tax at Source (TDS) from payment to or credit of RAJFED under Notification No. 50/2018-Central Tax dated 13.09.2018 for their services of procurement of gunny bags, transportation, insurance and services of surveyors for the applicant to be supplied by the applicant to it s principal NAFED itself. 3. PERSONAL HEARING In the matter personal hearing was granted to the applicant on 01.03.2019 at Room no. 2.29 NCRB, Statue Circle, Jaipur. Mr. G.N. Sharma, Advocate (Authorised Representative) of the applicant appeared for PH. During the PH, he reiterated the submissions already made in the application and also submitted additional submission (copy of establishment of RAJFED as a Co-operative society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agent, arhatia, del-credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another. As per section 2(13) of the IGST Act, 2017, intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account . Based on the legal definitions, the traits of an agent, in layman terms, can be determined as mentioned below: An agent is a person engaged in the supply or receipt of goods and/or services on behalf of other (the other person is referred to as the 'principal'). The agent carries on the business of supply and/or receipt of goods and/or services on behalf of the principal. The applicant is providing service of a commission agent for procurement of agricultural produce. The activity of commissioning agent is though taxable but if such services are provided in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. The applicant is issuing invoice for supply of goods (agricultural produce) to a purchaser/ buyer (as directed by NAFED) and is charging GST on such goods. b. Kray Vikray Sahakari Samiti is raising invoice in favour of the applicant for commission charges @ 1% of the value of supply. c. The applicant is raising invoice to NAFED for commissioning charges of itself as well as Kray Vikray Sahakari Samiti @ 1% each on the value of supply. As the applicant as a supplier of goods is raising invoice in his name for further supply thus holding of title of goods is being transferred from NAFED to the applicant. IV. Now in examining whether the activity undertaken is a supply of goods or not, the section 7 of CGST/RGST Act, 2017 which defines supply is reproduced below: 7. (1) For the purposes of this Act, the expression supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any supply under GST are consideration and in the course or furtherance of business . Where the consideration is not extant in a transaction, such a transaction does not fall within the ambit of supply. But, in certain scenarios, as elucidated in Schedule I of the CGST Act, the key element of consideration is not required to be present for treating certain activities as supply. One such activity which has been detailed in para 3 of Schedule I (hereinafter referred to as the said entry ) is reproduced hereunder: 3. Supply of goods- (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. It may be noted that the crucial factor is how to determine whether the agent is wearing the representative hat and is supplying or receiving goods on behalf of the principal. Thus, the key ingredient for determining relationship under GST would be whether the invoice for the further supply of goods on behalf of the principal is being issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1202 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken other than of seed quality. 66 1203 Copra other than of seed quality 67 1204 Linseed, whether or not broken other than of seed quality 68 1205 Rape or colza seeds, whether or not broken other than of seed quality. 69 1206 Sunflower seeds, whether or not broken other than of seed quality 70 1207 Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Saffower (Carthamustinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, other than of seed quality Thus, the applicant is liable for charging RGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -one per cent. or more participation by way of equity or control, to carry out any function; (b) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); (c) public sector undertakings. On examination of submissions of the applicant, it is found that the applicant is a co-operative society established under Rajasthan Cooperative Societies act, 1953 (Now 2001). The applicant is not a department, not a local authority, not a governmental agency and the co-operative society act is also different thus do not fall under any category of Section 51 of the CGST/RGST Act, 2017 and is not eligible to become a TDS deductor. Therefore provisions of TDS are not applicable in accordance with Section 51 of the CGST/RGST Act, 2017. 6. In view of the foregoing, we rule as follows:- RULING a. The applicant is not liable for charging goods and service tax under the RGST Act, 2017 and CGST Act, 2017 on providing service for procurement of agricultural produce i.e. oilseeds and pulses from farmers either itself or throug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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