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TMI Blog2020 (4) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... ry incentives like say Pressure Cooker - HELD THAT:- As per Section 17(5)(h) of the Central Goods and Service Tax Act, 2017, credit is not allowed. Credit of the Agarbatti given free of cost - HELD THAT:- As per Section 17(5)(h) of the Central Goods and Service Tax Act, 2017, credit is not allowed. Credit of insurance and maintenance of these motor vehicles - HELD THAT:- As per Section 17(5)(a) of the Central Goods and Service Tax Act, 2017, such vehicles not eligible for credit - credit denied. - GUJ/GAAR/R/14/2019 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2018/AR/19) - - - Dated:- 23-8-2019 - R.B. MANKODI AND G.C. JAIN MEMBER Present for the applicant : C.A. Rubbal Bhanderi 2. The applicant has submitted following Qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomer and thereby increase the sales. Thus, this is only a marketing gimmick to ensure that distributors are encouraged to sell the products of applicant in preference to other company products. ii) Another typical problem faced in Agarbatti Market is the fact that value discounts are not passed on to the customer. To ensure that these are passed on to the end customer, we are forced to issue discounts in the form of offering Dhoop with Agarbatti instead of reducing the price of the Agarbatti. 2.2 Statement containing the applicant s interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant s view point and submissions on issues on which the advance ruling is sought): i) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, these appliances are not getting disposed of as gifts but are being offered as part of the contract and accordingly credit should be allowed on the same 1 Agarbatti Packet Free on purchase of one Carton box of Agarbatti This is done to encourage purchase of full carton boxes instead of cutting down the size of purchase. Purchase of one carton box also helps in reducing the various cost 1. Packing Material is saved - else same quantity will have to be packed in two different containers; 2. Admin Overheads can be avoided - Counting, Re-packing, Re-labeling etc. Further the cost of the free Agarbatti is already factored while determining the price of the entire carton box an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which are as under: Point 1 : As per telephonic information given by the tax payer M/s Moksh Agarbatti Co., the manufacturing activity is carried out by them at their Bengaluru unit. Further, they added that their Ahmedabad unit is godown/depo where no manufacturing activity is being carried out. They also informed that the Ahmedabad unit is in existence since last two years and they were registered with VAT department, however they further added that they were not registered with Central Excise or Service Tax Department. Point 2: As mentioned earlier, the tax payer was not registered with Central Excise or Service tax department, as per records of this office, no such issue appears pending or decided in any proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----- --- (b) the following supply of goods or services or both - ------------ --- ------ ---- (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of sections 74, 129 and 130. From the above, it s clear that the credit shall not be available to the applicant (M/s Moksha Agarbatti) in case of question 1 to 3 (mentioned at Sr. no. 14 of the application of the applicant and as reproduced at para 2 (i), (ii) and (iii) above.) as per Section 17(5)(h) of the Central Goods and Service Tax Act, 2017. 4.2 Section 17(5)(a) of the Central Goods and Service Tax Act, 2017 is reproduced below : (5) Notwithst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al insurance services in respect of such motor vehicles, vessels or aircraft insured by him; From the above, it is clear that the credit shall not be available in case of question 4 (mentioned at Sr. no. 14 of the application of the applicant and as reproduced at para 2 (iv) above.) as per Section 17(5)(a) of the Central Goods Service Tax Act, 2017. 5. In view of the foregoing, we rule as under R U L I N G Question 1: The tax payer offers one unit of Dhoop with a pack of Agarbatti (consisting of 10 pieces of Agarbatti). Can the tax payer claim credit of taxes paid on a) inputs used for manufacture of Dhoop? b) Purchase of dhoop from a third party vendor? Answer : Answered in negative. Question 2: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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