Notification No. 14/2018–C.T./GST – State Tax, dated July 12, 2018
The Government of West Bengal has partially modified Notification No. 13/2018-C.T./GST dated 06.06.2018 vide which e-waybill in respect to intra-State movement was made mandatory where consignment value exceeds Rs.1,00,000. Vide the new notification, generation of e-waybill for such intra-State movement of goods has been exempted where goods are being sent to a job-worker for job work or are being sent from one job-worker to another job-worker or are being returned to the principal after such job work, and where such transportation is not for final delivery of the finished goods.
M/s JSW ENERGY LTD [2018-TIOL-01-AAAR-GST]
Taxability – Appellate Authority for Advance Ruling, Maharashtra
The issue raised before the AAAR was whether the processing of goods belonging to another person qualifies as job work even if it amounts to manufacture? The relevant fact pattern of the case is that – JSW Energy Limited (JEL) is engaged in the business of power generation and JSW Steel Limited (JSL) is engaged in the business of manufacturing & supplying steel. The two entities proposed to enter into an agreement for the purpose of supply of coal by JSL to JEL and processing of such coal into power by JEL for captive use by JSL. The question under consideration is determination of applicability of GST on supply of coal and other inputs by JSL to JEL, supply of power by JEL to JSL and job work charges payable by JSL to JEL.
The AAAR held that the process undertaken by JEL amounted to manufacture & did not fall within the scope of ‘treatment or process’ as seen in the definition of job work. Further, since JEL and JSL were related parties, any supplies made between them even if without consideration, would attract GST.
M/s United Breweries Limited [2018-TIOL-92-AAR-GST]
Taxability – Authority for Advance Rulings, Karnataka
The applicant is engaged in manufacture and supply of beer under various brand names. The applicant, apart from manufacturing beer on its own, also has manufacturing arrangement with contract bottling units (‘CBU’) who manufacture brands of beer belonging to the applicant and supply such beer to market. CBUs manufacture beer bearing brands owned by the applicant by procuring raw materials, packaging materials, incurring overheads and other manufacturing costs etc. on its own and sell the beer directly to Government corporations / wholesale depending on the state market. CBU upon sale of goods accounts for its expenses & profits and transfer the balance amount to the applicant.
The question under consideration was activity of CBU would be considered as supply of services and whether GST is payable by the CBUs on the profit earned out of such manufacturing activity. Further, whether GST is payable by the Brand owner on the Surplus Profit transferred by the CBU to the Brand Owner out of such manufacturing activity. The AAR held that CBUs are not engaged in supply of service and therefore no GST is payable by the CBUs on the profit earned out of such manufacturing activity. GST is payable by the UBL (Brand owner) on the Surplus Profit transferred by the CBU.
Habufa Meubelen B V [2018-TIOL-97-AAR-GST]
Taxability – Authority for Advance Rulings, Rajasthan
The key issue brought before the AAR was whether reimbursement of expenses and salary paid by head office to liaison office established in India is liable to GST as supply of service, when no consideration for any service is charged/paid and if it is assumed that the reimbursement of expenses and salary claimed by liaison office is a consideration towards service, then what will be the place of service.
The AAR held that if the liason office in India did not render any consultancy or other services directly or indirectly, with or without any consideration and the liason office does not have significant commitment powers, except those which are required for normal functioning of the office on behalf of the head office, then the reimbursement of expenses and salary paid by the company based abroad to the liason office established in India will not attract GST.
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