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TMI Blog2019 (10) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017, in FORM GST ARA-01 discharging the fee of Rs. 5,000-00 each under the CGST Act and the KGST Act. 2. The Applicant company is registered under the Goods and Services Act, 2017. The applicant has sought advance ruling in respect of the following question: a) Whether the legally binding and prescribed activity of depositing the timber / wood by the applicant with the Government Timber Depot for disposal as per the provision of Section 104 of the Karnataka Forest Act will constitute a "supply" and therefore subject to payment of GST for keeping the goods at the custody of the auctioneer i.e. Government Timber Depot? b) If GST applicable on depositing timber with the auctioneer, on what value GST is chargeable in the invoice by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. The applicant identifies such excessive trees as part of its shade management policy and the same is cut down to protect the coffee bushes surrounding them from getting damaged. Such trees other than silver oak timber, along with dead standing/ wind fallen trees, but along with Rose wood will be transported to Government Auction Depots as mandated by the provision of the Forest Act for its disposal. c. The applicant supplies the Rosewood and Jungle kind timber (hereinafter collectively called "Timber / wood") to the Government Timber Depots at Thithimathi and Kushaianagara (both located in Kodagu District) as mandated under section 104 A of the Karnataka Forest Act read with Rule 127A of Karnataka Forest Rules made thereunder. d. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 4.1 The transaction of the applicant is examined and found that there are two types of transactions between the applicant and the Karnataka Timber Depots: (a) The sale of timber by the Karnataka Timber Depot on behalf of the applicant (b) provision of service of supervision of timber till the time of sale 4.2 The timber / wood belonging to the applicant is handed over to the Karnataka Timber Depot (referred hereinafter as "Depot") for auction or further supply and the Depot is raising invoice against s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for which the tax shall be paid for the transaction of supply explained in para 4.3 above, Section 15(4) of the CGST Act, 2017 mandates that where the value of supply of goods cannot be determined as per Section 15(1) then the same shall be determined in such manner as may be prescribed. 4.5 Rule 29 of the CGST Rules, 2017 reads as under: "Rule 29: Value of supply of goods made or received through an agent The value of supply of goods between the principal and his agent shall - (a) be the open market value of the goods being supplied, or at the option of the supplier, be ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person, where the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing taxable goods shall, before or at the time of, - (a) removal of goods for supply to the recipient, where the supply involves movement of goods; or (b) delivery of goods or making available thereof to the recipient, in any other case, issue a tax invoice showing the description, quantity and value of the goods, the tax charged thereon and such other particulars as may be prescribed:" A conjoint reading of the above two provisions makes it amply clear that the time of supply is the time of removal of timber/ wood by the applicant for supply to the depot. 7. Regarding the fifth question, it is a repetition of the earlier questions and hence not answered again. It is pertinent to note that the time of second supply involving timber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the applicant. 9. In view of the foregoing, we rule as follows RULING 1. The transaction of depositing timber with the Government Timber depot for disposal would amount to "supply" within the meaning assigned to it under the GST Act and GST is chargeable on the value of such supply. 2. The value of supply of timber to the Depot by the applicant shall be the open market value or the value as may be determined under Rule 30 or Rule 31 in that order. 3. There is no provision in the GST Act for shifting of the tax liability and considering that as a deemed discharge of liability. There are two supplies of timber involved in the chain of transactions, one when the timber is handed over to the depot by the applicant and the second when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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