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TMI Blog2020 (9) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... ;Supply'. The activities for which O M Expenses are being passed on and collected are 'Supplies' for the purpose of Section 7(1) of CGST Act, the same would be liable to be charged to GST as per the applicable rate laid down under the law and in accordance with the provisions of Section 15 of CGST Act. Quantum of O M Expenses chargeable to GST - HELD THAT:- Most of the expenses on individual basis are taxable e.g. expenses passed on for the employees benefit or salary or for re-imbursement purpose are not relatable to normal employer-employee relationship, thereby covered under Schedule III under Section 7 of the CGST Act. The employees recruited by the one office and working in another office does not have any employer-employee relationship with the office where they are actually working. The expenses incurred on such employees claimed from the actual employer would constitute supply and accordingly liable to pay GST. Same is the case with 'Medical Expenses' or 'Recruitment Expenses'. Accordingly, the expenses incurred on account of heads claimed to be exempted are also liable to be charged to GST. Transfer of miscellaneous income of the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e answer to (i) or (ii) is in affirmative, whether recovery against certain expenses such as interest cost, salary, depreciation etc. which do not attract GST due to either they being exempt or non taxable will also be liable to GST. iv. Whether transfer of miscellaneous incomes of applicant Corporation to DISCOMs, UPPTCL and other power companies will attract GST; v. If the answer to (i) or (ii) is in affirmative, whether GST paid on all taxable expenditures will be allowed as ITC to the Applicant for further adjustment of GST Payable on recovery of expenses by way of book entries. 4. As per the declaration given by the applicant in Form ARA 01 the issue raised by the applicant is neither pending in any proceedings not decided in any proceedings in the Applicant's case under any of the provisions of the Act. 5. The Applicant was granted a personal hearing on 28.08.2020. Shri Dharmendra Srivastava, Chartered Accountant and Authorised Representative alongwith some officers of UPPCL appeared for hearing through video conferencing on behalf of the applicant. During the personal hearing they reiterated the submissions already made under their Application dated 30.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine the term 'Supply' Section 7 (1) - Supply The term Supply has been defined under section 7 (1) of the CGST Act by way of Scope of Supply which 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) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule made or agreed to be made without a consideration. Thus, Supply has two important elements: Supply is done for a consideration Supply is done in course of furtherance of business Under the CGST Act, a transaction will attract GST only if it qualifies as a 'supply' as defined above. The term 'supply' has been defined to include all forms of supply of goods or services, such as sale, transfer, barter, license, or lease made or agreed to be made for a consideration in the course of or in furtherance of business. The term 'supply' also seeks to include within its purview transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain expenses such as Interest Cost, Salary, Depreciation do not attract GST as being exempt or non-taxable and therefore, not liable to GST. In this regard, we have considered each individual head for the purpose of examining the applicability of GST on the same. We find that most of the expenses on individual basis are taxable e.g. expenses passed on for the employees benefit or salary or for re-imbursement purpose are not relatable to normal employer-employee relationship, thereby covered under Schedule III under Section 7 of the CGST Act. The employees recruited by the one office and working in another office does not have any employer-employee relationship with the office where they are actually working. The expenses incurred on such employees claimed from the actual employer would constitute supply and accordingly liable to pay GST. Same is the case with 'Medical Expenses' or 'Recruitment Expenses'. Accordingly, we hold that the expenses incurred on account of heads claimed to be exempted are also liable to be charged to GST. 11. As regards, the transfer of miscellaneous income of the Applicant Corporation to DISCOMs which is the subject matter of quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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