TAXABLE SUPPLY OR NOT

 2020 (10) TMI 812 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA

IN RE: M/S THE KARNATAKA STATE CO-OPERATIVE MARKETING FEDERATION LIMITED

Taxable supply or not - transaction of supplying Kharif Arhar (Tur) Crops and Green Gram crops from farmers to NAFED - rate of tax to be charged for sale of Agricultural produce to NAFED - Input tax credit on GST paid on purchase of Gunny bags by KSCMFL - deduction of TDS - applicability of Section 51 and Notification 50/2018 - Central Tax dated 13^th September 2018.

HELD THAT:- In the instant case, the applicant is involved in the supply of the Kharif Arhar (Tur) and Kharif Green Gram to NAFED procured from the farmers for which applicant receives consideration in the course or furtherance of business. Hence the supply of Kharif Arhar (Tur) and Kharif Green Gram to NAFED by the applicant amounts to supply in terms of Section 7(l)(a) of the CGST Act 2017.

Exempted supply or not - HELD THAT:- The tariff item 0713 relating to Dried Leguminous Vegetables, shelled, whether or not skinned or split listed under the entry No.45 of the Notification No.2/2017- Central Tax(Rate) dated 28th June, 2017. Hence the supply of tur dal and green gram without any brand name by the applicant to NAFED is an exempted supply as per entry No.45 of the Notification No.2/2017- Central Tax(Rate) dated 28th June, 2017.

Input tax credit - HELD THAT:- The applicant purchasing gunny bags from third parties to pack the procured Kharif Arhar (Tur) and Kharif Green Gram from the farmers, by paying GST @ 5%. Since the supply of tur dal and green gram is an exempted supply as per entry No.45 of the Notification No.2/2017- Central Tax(Rate) dated 28th June, 2017 the input paid on purchase of gunny bags is ineligible to claim as input tax credit as per subsection 2 of section 17 of the CGST Act, 2017. The subsection 2 of section 17 of the CGST Act 2017 clearly says that, the amount of credit shall be restricted to so much of the input tax as is attributable to the taxable supplies including zero-rated supplies - hence, input tax paid on the purchase of gunny bags shall not be claimed as input tax credit as per subsection 2 of section 17 of the CGST Act 2017 as the applicant used the said gunny bags for packing and supplying exempted goods.

Deduction of TDS - HELD THAT:- The applicant is neither established by any Government with 51% or more participation by way of equity or control, to carry out its function nor is a Society established by the Central Government or the State Government or a local authority under the Society Registration Act, 1860. Hence the applicant is not covered under the list provided either in the Notification 50/2018 - Central Tax dated 13/09/2018or under the list prescribed under Section 51 of CGST/KGST Act,2017.Therefore the provisions of TDS as prescribed under section 51 of CGST/KGST Act, 2017 are not applicable to the applicant.

No.- KAR ADRG 53/2020

Dated.- October 12, 2020