Top Stories AAR and AAAR Weekly Round Up By Aiswarya Krishnadas – On March 10, 2024 8:02 am – 4 mins read This roundup analytically summarizes the stories related to the Goods and Services Tax Authority for Advance Ruling ( AAR ) and Appellate Authority for Advance Ruling ( AAAR ) that were published at Taxscan.in. During the period from March 01, 2024 to March 09, 2024. GST: ITC Allowable for Goods Purchased from External Vendors When Payment is Settled through Book Adjustment in Sale and Buyback Transactions, rules AAR In Re: PARAGON POLYMER PRODUCTS PVT LTD CITATION:   2024 TAXSCAN (AAR) 120 A two member bench of West Bengal Authority for Advance Ruling Goods and Services Tax ( AAR ) held that settlement of mutual debts through book adjustment is a valid mode of payment under the Goods and Service Tax ( GST ) Act, 2017. The authority observed that Input Tax Credit ( ITC ) is allowable for goods purchased from external vendors when payment is settled through book adjustment in sale and buyback transactions. The bench comprising Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGST ) held that settlement of mutual debts through book adjustment is a valid mode of payment under the GST Act.

Recipient can pay the supplier by way of setting book debt since the provision of the Act has not put any restriction in this regard. Therefore, claiming credit of Input Tax Credit ( ITC ) cannot be denied on the sole ground that consideration is paid through book adjustment. GST leviable on Export of Pre-Packaged and Labelled Rice upto 25 Kgs to Foreign Buyer: AAR In Re : M/S Sarala Foods Private Limited CITATION:   2024 TAXSCAN (AAR) 118 The Andhra Pradesh Authority for Advance Ruling ( AAR ) observed that GST is leviable on export of pre-packaged and labelled rice upto 25 kgs to foreign buyer. A Two-Member Bench comprising K. Ravi Sankar and B. Lakshmi Narayana observed that “In the instant case, the ultimate buyer is not present and the commodity is being pre-packed for an unknown ultimate buyer.

The buyer from the applicant is re-selling the same to another buyer be it export or indigenous. This advance ruling authority agrees with the observation regarding the applicability of GST on “prepackaged and labelled” irrespective of the fact that whether it is for domestic sale or exported outside the country.” Services that Do not Include Any Supply of Goods can be Categorized as Pure Services: AAR In Re: M/S SWAPNA PRINTING WORKS PVT LTD CITATION:   2024 TAXSCAN (AAR) 119 The West Bengal Authority for Advance Ruling ( AAR ) of Goods and Services Tax matters has ruled that supply of services which does not involve any supply of goods can be regarded as pure services. The two member bench comprising Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGST ) held that “term “pure services‟ has not been defined under the GST Act. However, a bare reading of the description of services as specified in serial number 3 above denotes that supply of services which does not involve any supply of goods can be regarded as pure services.

The said entry serial, therefore, specifically excludes works contract services or other composite supplies involving supply of any goods. On the other hand, to qualify to be a supply under serial number 3A above, a composite supply, subject to fulfilment of other conditions as specified in the said entry, would be such that the maximum value of involvement of goods is less than 25% of the total value of the said composite supply.” Processed Pulses attract GST at 18%: AAR The Andhra Pradesh Authority for Advance Ruling ( AAR ) has mandated an 18% Goods and Services Tax ( GST ) on processed pulses resulting from the dehusking and splitting of grains. This ruling distinguishes these processed pulses from whole pulse grains and categorizes them as non-agricultural produce. Additionally, the AAR has determined that an 18% GST applies to brokerage charges on transactions involving agricultural produce.

This decision comes in response to a case involving Gayatri Enterprises, a broker in Andhra Pradesh specializing in products such as urad dal, moong dal, toor, jowar, and karamani. The company invoices parties solely for the brokerage amount, with no mention of its name in sale or purchase invoices. The AAR further categorized the company’s role as a broker in pulses as that of a commission agent. Regardless of whether the goods involved are exempt or taxable under the GST regime, the AAR ruled that the company is obligated to pay an 18% GST, the applicable rate for commission agents. Advance Ruling cannot be given on Assumed Scenarios in Absence of Relevant Documents: AAR In Re M/S: VISTAR AEC CONSULTANTS LLP CITATION:   2024 TAXSCAN (AAR) 121 The two member bench of the Authority for Advance Ruling ( AAR ) Karnataka, observed that question of Goods and Service Tax ( GST ) on Revenue Sharing does not arise when Tax Invoice is issued by Supporting Bidder of Contract

The tribunal comprising Dr. M.P.Ravi Prasad and Kiran Reddy. T observed that the Applicant cannot consider the GST at the rate as applicable to the client. The exemption of GST was not applicable to the Applicant. The AAR concluded that the Advance ruling cannot be given on assumed scenarios in the absence of relevant documents. ITC for renting Electrical Equipments can be claimed on fulfillment of conditions u/s 16 of GST Act: AAR In Re M/s SUN KNOWLEDGE PRIVATE LIMITED CITATION:   2024 TAXSCAN (AAR) 117 The two member bench of West Bengal Goods and Services Tax ( GST ) Authority for Advanced Rulings ( Aar ) ruled that a registered person is eligible to avail credit of input tax if all the conditions laid down in section 16 of the Goods and Services Tax ( GST ) Act, 2017 get fulfilled and such credit is not restricted under sub-section (5) of section 17 of the Act GST Act. The two member bench comprising Dr Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Senior Joint Commissioner, SGSTA ) held that registered person is eligible to avail credit of input tax if all the conditions laid down in section 16 of the GST Act get fulfilled and such credit is not restricted under sub-section (5) of section 17 of the GST Act.