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TMI Blog2024 (6) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... sentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as an Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. DCW Limited, No. 45, Sahupuram, Arumuganeri, Kayalpattinam North Village, Thoothukudi, Tamil Nadu - 628 229 (hereinafter called as 'the Applicant') is engaged in the manufacture of chemical products like 'Caustic Soda', PVC resin etc. They are registered under the GST Acts with GSTIN 33AAACD0559N1ZN. They have filed an application seeking Advance Ruling on the following questions: 1) Whether the exporter (M/s. DCW Ltd.) is liable under RCM basis to pay GST on the export freight on the FOB basis of exports; 2) Whether the shipping line who accepts the goods from the exporter (M/s. DCW Ltd.) is liable to pay GST on RCM basis; 3) Whether the FOB basis ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for adjudication in the applicant's case relating to the question raised in the application for advance ruling section 98 (1). The Joint Commissioner (ST), Intelligence, Tirunelveli has also remarked that there is no pending proceedings in the applicant's case in his jurisdiction. 7.1 The Applicant, was given an opportunity to be heard in virtual mode on 29.11.2023. Shri M. Thyagamoorthy, General Manager (Legal & Indirect Taxation), who is the Authorized Representative of the Applicant appeared for the virtual hearing and he reiterated the submissions made in their application. He explained that M/s. DCW Ltd., are engaged in the manufacture of around 13 different chemical product like 'Caustic Soda', PVC resin etc., and that they export around Rs. 250 crores of their goods, annually. He explained in brief about the nature of queries raised and stated further that the queries raised in the instant case pertain basically to exports made by them on FOB basis. 7.2 The members requested the authorised representative to offer clarity on the various queries raised in the instant application, especially in relation to the queries raised by the applicant vide SI. No. 3 and 4, which talks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove constitutes an inter-state supply subject to IGST; and 5) If liable to GST, what is the taxable value to be adopted as freight is not known to the exporter. 9.2 Prima facie, it is observed that all the queries relate to (i) Applicability of a Notification issued under the provisions of this Act; (ii) Determination of the liability to pay tax on any goods or services or both; and, (iii) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. Thereby, the queries under consideration get covered under Section 97 (2) (b), 97 (2) (e) and 97 (2) (g) of the CGST Act, 2017, and accordingly, the application is liable for admission. 9.3 As the term 'place of supply' plays a significant role in the taxability and the nature of tax to be charged, provisions relating to the same as in 'Chapter V' covering Sections 10 to 14 of the IGST Act, 2017, needs to be discussed in this case before proceeding further. The situations covered under the relevant Sections are as below: - Section 10 - Place of supply of goods other than supply of goods imported int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso to Section 12 (8) of the IGST Act, 2017 which was inserted with effect from 1.02.2019, and which read as "Provided that where the transportation of goods is to a place outside India, the place of supply shall the place of destination of such goods.". Therefore, since the supplier (shipping line/freight forwarder) of service (transportation of goods by vessel/air), is in India, and the recipient (the applicant) is also in India, the place of supply is to be determined in terms of Section 12 of the IGST Act, 2017, in such cases. Accordingly, from 1.10.2022 onwards taxes under IGST is liable to be discharged in the instant case, in terms of Section 7 (5) of the IGST Act, 2017, read with proviso to Section 12 (8) of the Act, ibid, which fixes the place of supply, as the 'place of destination of such goods', which is outside India. 9.6 Apart from the proviso to Section 12 (8) of the IGST Act, 2017, it is also seen that Section 13 of the IGST Act, which provides for 'place of supply of services in a situation where the location of supplier, or location recipient, is outside India', states in sub-section 9 to Section 13, as follows "(9) The place of supply of services of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against serial number 10 of the table. 3 13/2023-IT (R) dt. 26.09.2023 10/2017-IT (R) dt. 28.06.2017 (ROM Notification) Serial number 10 and the entries relating thereto of the table, omitted. 9.9 We find that in the instant case, the queries raised by the applicant revolves around the "export freight" involved on the export of goods undertaken by the applicant on "FOB basis". In this regard, we find that under the 'statement of facts' furnished by the applicant, they have stated as follows in respect of FOB basis of exports, i.e., "In case of FOB basis of export, the freight is paid by the overseas buyer to the freight forwarder/ shipping line. The exporter hands over the export goods either factory stuffed or port loaded in the container to the shipping line at the customs port. The exporter filed shipping bill is assessed by the customs and the let export order is issued by customs after the containers are loaded into the ship and it sails the port on the basis of export general manifest filed by the shipping line." It is understood from the above that the exporter of goods (the applicant) delivers the goods, either factory stuffed or port loaded in the container to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. We find that a major part of the queries seek clarity on liability, if any, under reverse charge (RCM) basis. Therefore, we are of the opinion that a discussion on the notifications involving RCM is required to be made before proceeding further. In this regard, it may be noted that in exercise of the powers conferred by sub-section (3) of Section 9 of the Central Goods and Services Act, 2017, the Government notifies certain category of supply of goods or services or both, the tax on which only, shall be paid on reverse charge basis (RCM) by the recipient of such goods or services or both. Accordingly, Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017, as amended, enumerates the supply of certain services on which tax under RCM is liable to be paid. Likewise, Notification No. 10/2017-Integrated Tax (Rate) dated 28.06.2017, as amended, also enumerates the supply of certain services on which tax under RCM is liable to be paid, as empowered by sub-section (3) of Section (5) of the Integrated Goods and Services Act, 2017. On perusal of both the notifications referred above, it is seen no such entries related to 'export freight' find a place in the said notifications. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter-state supply subject to IGST - As stated already, the issue has been discussed in detail in para 9.11 above. However, we are of the opinion that the above query on 'export freight involved' need not be answered, as it does not relate to the applicant, and as the applicant does not undertake or receive 'export freight' service as stated in para 9.12.1 above. 9.12.5 If liable to GST, what is the taxable value to be adopted as freight is not known to the exporter - Does not apply, as the query No. 4 has not been answered, and as the issue involving 'export freight', does not relate to the applicant. 10 Based on the above discussions, we rule as under: RULING S.No. DESCRIPTION OF THE QUERIES RAISED RULING 1 Whether the exporter (M/s. DCW Ltd.) is liable under RCM basis to pay GST on the export freight on the FOB basis of exports? The question of payment of GST under RCM by the applicant does not arise. 2 Whether the shipping line who accepts the goods from the exporter (M/s. DCW Ltd.) is liable to pay GST on RCM basis? Not answered, as the shipping line is not the applicant 3 Whether the "export freight involved" is liable to GST on RCM basis for the goods exported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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