Activity ofgranting right to manufacture beer is a supply of service : AAAR

Activity ofgranting right to manufacture beer is a supply of service : AAAR | Activity ofgranting right to manufacture and supply beer is a supply of service : AAAR modifes AAR Ruling The Appellate Authority for Advance Ruling in Karnataka in matter of M/s United Breweries Limited The AAAR modified the ruling rendered by the AAR is as under: -

1. The activity engaged in by the Appellant by way of granting the Central Brewing Unit the right to manufacture and supply beer bearing its brand name, in return for a consideration, is a supply of service as mandated in Section 7 of the CGST Act 2017, read with Clause 5(c) of the Schedule II of the said Act.
2. The supply of service by the Appellant is taxable to GST in terms of Section 9 of the CGST Act. (c ) The service supplied by the appellant is classified under the Service Code 999799 as other services nowhere else classified
3. The amounts received by the appellant from the contract brewing units under the agreement in the nature of Brand Fee and reimbursement of expenses is termed as a consideration for the supply of service and is chargeable to GST at the applicable rate of 18%.

  Below is the extract of Order: 48. ln view of the above discussions, the Ruling dated 28 .. 06.2018 passed by the Karnataka Authority for Advance Ruling is modified as under: a) The activity engaged in by the Appellant by way of granting the contracting brewing units the representational right 10 manufacture and supply beer bearing its brand name, in return for a consideration, is a supply of service as mandated in Section 7 of the COST Act read with clause 5(c) of the Schedule 11 of the said Act. b) The supply of service by the Appellant is taxable to GST in terms of Section 9 of the CGST Act. c) The service supplied by the Apellant is classified under the Service. Code 999799 as "other services nowhere else classified". d) The amounts received by the Appellant from the contracting units under the Agreement, in the nature of Brand Fee and reimbursement of expenses, is termed as a consideration for the supply of service and is chargeable to GST at the applicable rate of 18%. 49. The appeal is disposed off in the above manner. Click here to download AAR Order against which Appeal has been filed Click here to download AAAR Order