No Advance Ruling to be given on questions already decided by jurisdictional authority: AAR

The Applicant is a flour miller, engaged in providing services of crushing wheat provided by the State Government, into fortified atta which in turn is supplied by the State Government through Public Distribution System. The ownership of wheat or atta is never transferred to the Applicant.

The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01: (i) What is the value of supply of services provided by the applicant Company to the State Government? (ii) What is the rate of tax applicable on the value of supply? What components are to be included in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018- Central Tax (Rate)?

However, in course of personal hearing, it has come to notice of Advance Ruling Authority (AAR) that while disposing of a refund claim amounting to Rs.5,50,62,464/- of the applicant for the period 01/07/2017 to 31/12/2020, the Assistant Commissioner, CGST & CX, Berhampore Division in his Speaking Order No. 08/GST/Refund/AC/BER/2022-23 dated 09.01.2023 made the following observations:-

The taxpayer’s claim that they paid GST under tax bracket of 5% in absence of any precedence stipulating the value of supply of goods in the said composite supply is not tenable as Sl. No.3A of Notification No. 12/2017-Central tax (Rate) dated 28.06.2017 clearly exempts such composite supply of goods & services in which the value of supply of goods constitutes not more than 25 percent of the value of the said composite supply provided to the Central Govt., State Govt. or Union Territory or Local Authority or a Govt. Authority or a Govt. Entity by way of any 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. The value of goods and services in the composite supply made by them was to be calculated by them and if the supply was eligible for exemption they were free to avail the exemption in terms of Sl. No.3A of Notification No. 12/2017-Central tax (Rate) dated 28.06.2017. But they preferred to pay tax @5% under entry no. 26 of Notification No. 11/2017-Central tax (Rate) dated 28.06.2017. It implies that they were aware of their contribution of goods and services in terms of percentage of value of the composite supply and so their supply is not exempt from GST. The tax rate of 5% is applicable in case of job work service provided to a registered person. Further, Circular No. 153/09/2021-GST dated 17/06/2020 clarifes that if composite supply / job work service in which the value of composite supply does not exceed 25% of the value of the composite supply is provided to any unregistered party, GST @18% is applicable on the entire value of supply.

The noticee remained silent whether the supply was made to a registered person or not. They also did not submit any copy of contract entered into by the company with the State Govt for the period of refund. They provided a copy of contract entered into by the company with the State Govt. that was made on 3rd March, 2022. Therefore, whether the composite supply during the period from 01.07.2017 to December, 2020 was made to the State Govt. or not could not be ascertained. The Noticee claimed that the judgement made by the West Bengal Authority for Advance Ruling in the case of M/s. Berhampur Warehousing Private Limited [2022(9) TMI 367] and the judgement made by the Appellate Authority for Advance Ruling, West Bengal in the case of M/s. Maa Laxmi Enterprise [2022(9) TMI 202] are applicable to them as the case of the noticee is identical with the business entity. They further claimed that the State Govt vide Notification No. 2834FS/ Sectt/ Food/ 4P-14/ 2013 dated 06.09.2017 published in the official Gazette of Kolkata, have specified rate of supply of goods and services and terms of the contract which were also same for all the flour mills. The claim of the noticee is based on the fact that the terms and condition laid down in said notification were also completely identical for all the millers. But in the absence of any contract between the noticee and the State Govt. during the period under consideration it could not be ascertained that they made the supply to the State Govt. Therefore, unless and until it is proved that the noticee made the said supply to the State Govt. under same terms and condition and the details of business of those aforesaid business entities are made known to the office, their submission of “identical matters” appears not to be acceptable.

It was found that the said composite supply is not exempt from tax and as the supply was not made to the registered person, GST @18% is applicable on the said supply. Therefore, the refund claim of Rs.5,50,62,464/- is found non-refundable to the taxpayer as per Section 54 of the CGST Act, 2017 read with Rule 92(3) of the CGST Rules, 2017.

It thus appeared that the question raised by the applicant has already been decided by the jurisdictional authority in a prior proceeding while deciding the refund claim as discussed. Therefore, the present case is hit by the first provision to Section 98(2) of the GST Act.

Hence no ruling was passed in the instant case.

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