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TMI Blog2022 (9) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 5 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future. The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials. So the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value. In the instant case the supply of fortified wholemeal flour to the Food Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) and exempt from taxation. Appeal disposed off. - Appeal Case No. 01/WBAAAR/APPEAL/2022 - - - Dated:- 22-8-2022 - MS. V. RAMA MATHEW, AND MR. KHALID AIZAZ ANWAR, MEMBER Present for the Appellant: Sri Sandip Choraria, Advocate Smt. Payel Agarwal, ACA Present for the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also from the invoices raised by the miller on the Food Supplies Department. Thus the consideration paid to flour millers for crushing100 kg wheat is as following: Value of supply (in Rs.) for crushing 100 kg wheat (2 gunny bags full): (i) Crushing Charges: 90.78 (ii) Add fortification cost: 10.00 (iii) Add packing charges: 50.00 (iv) Add Transportation handling charges: 28.70 (v) Add consideration from sale of bran: 80.00 (vi) Add consideration from sale of refractor: 1.00 Total value of supply [(i) to (vi)]: 260.48 ------- (A) (vii) Consideration from sale of gunny bags: 43.00 (viii) Add consideration from sale of bran: 80.00 (ix) Add consideration from sale of refractor: 1.00 Total non-cash consideration (vii) to (ix): 124.00 -------- (B) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 100 kg wheat. Further the miller supplies the packing material as per specifications and for this Rs.50/- is received for packing of 95 kg atta produced from 100 kg wheat. So the value of goods supplied in the composite supply stands at Rs.60/- for 100 kg wheat and the WBAAR also agreed upon this valuation. However regarding valuation of the entire composite supply, the WBAAR did not accept the valuation of Rs.260.48 for crushing of 100 kg wheat as per para 5 above under the observation that the valuation of non-cash consideration remained inconclusive as the appellant could not produce any documents regarding receipts of consideration from sale of gunny bags, bran and refractor. 8. In light of the observations stated above the WBAAR was of the view that the value of supply shall be both cash and non-cash consideration and exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) will be available when the value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply. In case the value of goods supplied exceeds 25% of value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks as per stipulation. The Appellant submits that the WBAAR erred in its judgement on considering the actual consideration received for sale of gunny bags, bran and refractor to be a part of the valuation of composite supply. 10. During the course of hearing the Appellant s authorised advocate reiterated the points as stated in the Grounds of Appeal. He emphasized on the point that non-cash consideration as fixed by the Food Supplies Department, Government of West Bengal needs to be taken for valuation of composite supply of milling services at Rs.260.48 against every 100 kg wheat and not dependent on the actual consideration received from the open market from disposal of gunny bags, bran and refractor. He also argued that it was established before the WBAAR that the non-cash consideration will be a part of total consideration of the composite supply and which was also accepted by the WBAAR as observed from the order dated 31.12.2022. In this connection the Appellant s authorised advocate submitted Memo No. 569(3) - FS/Sect./Food/4P-02/2016/2021 dated 18.02.2022 issued by the Food Supplies Department, Government of West Bengal where it is clarified that the total non-cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FS/Sect./Food/4P-02/2016/2021 dated 18.02.2022 that the total supply price is Rs.260.48 for milling services to produce 95 kg fortified atta from 100 kg wheat. The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials. So the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value. The WBAAR, in its advance ruling dated 31.12.2021, has observed that the instant supply is a composite supply. The WBAAR has also observed that the instant composite supply undisputedly fulfils criteria (i) and (ii) in Para 7 above. Now, it has been observed that the value of goods in the instant composite supply is lesser than 25% of the total supply value. So the instant composite supply fulfils all the three criteria for qualifying for exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 FT dated 28.06.2017) as listed in para 7 above. In view of above discussion, we rule that in the instant case the supply of fortified wholemeal flour to the Food Supplies Department, Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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