9911796707
TMI Blog2022 (1) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... for exemption vide entry serial 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [corresponding State Tax Notification No. 1136-FT dated 28.06.2017]. Otherwise, the supply shall attract tax @ 5% vide entry serial No. 26 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 [corresponding State Tax Notification No. 1135-FT dated 28.06.2017]. - Case No. 19 of 2021 Order No. 18/WBAAR/2021-22 - - - Dated:- 31-12-2021 - MR. BRAJESH KUMAR SINGH, AND MR. JOYJIT BANIK, MEMBER Applicant s representative heard : Mr. Sandip Choraria, Authorized Representative Mr. Rajkumar Banerjee, Authorized Representative Ms. Payel Agarwal, ACA Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 3A? 1.5 The aforesaid questions on which the advance ruling is sought for are found to be covered under clause (b) and (e) of sub-section (2) of section 97 of the GST Act. 1.6 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act. 1.7 The officer concerned from the Revenue has raised no objection to the admission of the application. 1.8 The application is, therefore, admitted. 2. Submission of the Applicant Fact of the case as submitted by the applicant along with interpretation of law made by him is reproduced herein under: 2.1 The Indian Food Security System was established to distribute food and non-food items to India s poor at subsided rates. Major commodities are distributed including staple food grain, sugar and essential things like kerosene through a network of fair price shops distribution and is managed by State Government through the ration shops. Basic objective of Public Distribution System is to serve the below poverty line family. The Essential Commodities Act, 1955 was legislated to provide in the interest of general public co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmat as may be provided by District Controller, Food and Supply or by the Director, District Distribution of Procurement Supply (DDP S). 2.4 The aforesaid activity of Public Distribution System is in relation to the function of safe guarding the interest of weaker section of the society, entrusted to a municipality under Article 243W read with twelfth schedule of the Constitution of India as because para 2(f) of the West Bengal Urban Public Distribution System (Maintenance and Control) Order, 2013 is relevant which speaks as follows: 2(f) Below poverty line family means those family who have been identified as such by the concerned authority under the Government of West Bengal and to whom BPL Ration Cards have been issued for distribution of public Distribution Commodities under BPL Scheme along with other specified items of daily use under Public Distribution System. 2.5 The applicant has given a brief account of the job work done in the nature of crushing food grains supplied and owned by Food Supplies Department, Govt. of West Bengal which is enumerated as below: - (a) The State Govt. (Food Supplies Department) sends the whole, unpolished food grain to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Ministry of Finance (Department of Revenue), New Delhi, in exercise of powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017, on being satisfied that it is necessary in the public interest so to do so, on the recommendation of the Council, while making further amendments in the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, inserted serial number 3A which states as hereunder:- Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 3A Chapter 99 Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any funct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sl. no. 3A of the notification No. 12/2017- CT (R) dated 28.06.2017. 2.11 Distribution through PDS is covered under Entry No. 28 of the Eleventh Schedule of the Constitution. It is an activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. 2.12 The Government of India, Ministry of Finance, Department of Revenue, North Block, New Delhi vide its recent Circular No. 153/09/2021-GST dated 17.06.2021 has further clarified in the matter of GST applicability on milling of wheat into flour or paddy into rice for distribution by State Governments under PDS, wherein it has been clarified as hereunder: Public Distribution specifically figures at entry 28 of the 11th Schedule to the constitution, which lists the activities that may be entrusted to a Panchayat under Article 243G of the Constitution. Hence, said entry No. 3A would apply to composite supply of milling of wheat and fortification thereof by miller, or of paddy into rice, provided that value of goods supplied in such composite supply (goods used for fortification, packing materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In addition to this, the concerned officer from the revenue has not expressed any other view on the issue raised by the applicant. 4. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the Revenue. 4.2 Admittedly, the applicant has entered into an agreement with the District Controller of Food and Supplies, Government of West Bengal for supply of fortified atta upon crushing and processing of wheat provided by the State Government. The issue involved in the instant case, as we find, is to determine whether the instant supply shall get covered under entry serial no. 3A of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 or not which is required to be analysed considering the following aspects: (a) whether the supply made by the applicant can be regarded as composite supply of goods and services; (b) if the supply qualifies as composite supply, whether the same is made by way of any activity in relation to any functi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... West Bengal Public Distribution System (Maintenance Control) Order, 2013 and clauses 33 and 34 of the West Bengal Urban Public Distribution System (Maintenance Control) Order, 2013. In this context, we refer to Para 3.1 of the Circular No. 153/09/2021-GST dated 17.06.2021 where it is stated that Public Distribution specifically figures at entry 28 of the 11th Schedule to the constitution, which lists the activities that may be entrusted to a Panchayat under Article 243G of the Constitution. Hence, the instant composite supply made by the applicant is found to be in relation to any function entrusted to a Panchayat under article 243G of the Constitution. 4.7 The issue now left with us is to ascertain whether the value of supply of goods in this case exceeds 25 percent of the total value of the supply or not. According to the applicant, the value of supply of services in respect of milling of 100 kilograms wheat should be ₹ 260.48 though the applicant receives consideration in cash only to the tune of ₹ 136.48 against such supply. The applicant has contended that the value of supply shall include consideration not received in money but otherwise in the form of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article 243W of the Constitution; iii) The value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply. 4.13 In Para 3.2 of the Circular No. 153/09/2021-GST dated 17.06.2021 [CBIC-190354/36/2021-TRU Section-CBEC], it has been clarified that In case the supply of service by way of milling of wheat into flour or of paddy into rice, is not eligible for exemption under Sl. No. 3 A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 for the reason that value of goods supply in such a composite supply exceeds 25%, then the applicable GST rate would be 5% if such composite supply is provided to a registered person, being a job work service (entry No. 26 of notification No. 11/2017- Central Tax (Rate) dated 28.06.2017). Combined reading of the definition of job-work [section 2(68), 2(94), 22, 24, 25 and section 51] makes it clear that a person registered only for the purpose of deduction of tax under section 51 of the CGST Act is also a registered person for the purposes of the said entry No. 26, and thus said supply to such person is also entitled for 5% rate. 4.14 In the instant case, the supply undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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