The value of by-products so retained by the appellant yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply
Authority for Advance Ruling — Job Work – The applicant challenged the tax orders passed by the respondent for the tax periods from July, 2017 to June, 2018. The assessing authority has held on scrutiny of appellant returns and after obtaining certain information from Civil Supplies Department, the dealer need to be assessed under Section 74 of Act, 2017, and passed orders accordingly after issuing a show cause notice. The appellant receives certain amount i.e. Rs. 15/- per quintal as CMR charges and also retains the residuary products of broken rice, bran, husk and these by-products are supposedly retained by the miller such milling job work service for the job work. The respondent authority worked out the market value of these by-products and estimated the average yielding after which he has determined the tax liability considering the retained by-products value also as part of consideration with reference to value of supply. The applicant filed appeal mainly on the basis that (i) the assessment order been given without invoking any specific provision of the act; (ii) if the department considers the value of other by-products as a part of service charges, then the department should take it up for raising an invoice for the total deemed value and the Government/Corporation should pay the necessary GST on services. The authority observed that the value of by-products so retained yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply and also to be termed as a bona fide form of consideration.
Held that:- The Hon’ble Authority for Advance Ruling dismissed the appeal.
The value of by-products so retained by the appellant yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply
Authority for Advance Ruling — Job Work – The applicant challenged the tax orders passed by the respondent for the tax periods from July, 2017 to June, 2018. The assessing authority has held on scrutiny of appellant returns and after obtaining certain information from Civil Supplies Department, the dealer need to be assessed under Section 74 of Act, 2017, and passed orders accordingly after issuing a show cause notice. The appellant receives certain amount i.e. Rs. 15/- per quintal as CMR charges and also retains the residuary products of broken rice, bran, husk and these by-products are supposedly retained by the miller such milling job work service for the job work. The respondent authority worked out the market value of these by-products and estimated the average yielding after which he has determined the tax liability considering the retained by-products value also as part of consideration with reference to value of supply. The applicant filed appeal mainly on the basis that (i) the assessment order been given without invoking any specific provision of the act; (ii) if the department considers the value of other by-products as a part of service charges, then the department should take it up for raising an invoice for the total deemed value and the Government/Corporation should pay the necessary GST on services. The authority observed that the value of by-products so retained yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply and also to be termed as a bona fide form of consideration.
Held that:- The Hon’ble Authority for Advance Ruling dismissed the appeal.