Category: Exemption under GST

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Supply of electrical accessories to space center not entitled to exemption

  • Specified goods supplied to Public Funded research institutions covered by Notification 45/2017 dated 14-11-2017 like SRI HARI KOTA Space Centre are exempt.
  • Exemption is provided only for

a)Scientific and technical instruments, apparatus, equipments (including computers‘

b)Accessories, parts, consumables, and live animals ( experimental purpose)

c)computer software

d)Prototype

Supply of electrical accessories to ‘Space center’ are not specified goods and hence exemption is not available

[C R Enterprises [2018] 94 taxmann.com 87 (AAR- ANDHRA PRADESH) 10-05-2018]

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Registered Brand Name: Forego actionable claim by filing affidavit and printing “give up” declaration on unit container to avail NIL Rate GST

Following items under registered brand name and put in unit container are taxable @ 5%

  1. Tender Coconut Water
  2. Organic Manure
  3. Chenna or Paneer
  4. Natural Honey
  5. Wheat and Meslin
  6. Wheat and Meslin flour
  7. Rye
  8. Barley
  9. Oats
  10. Maize
  11. Rice
  12. Grain Sorghum
  13. Buck Wheat
  14. Cereal Flours
  15. Cereal groats, meal and pellets
  16. Flour, of potatoes
  17. Flour, of the dried leguminous vegetables

 

If the above items are put in unit container but not supplied in registered brand name, then tax rate is NIL. Also even if the above items are in registered brand name but not put in unit container still the tax rate is NIL. Hence for above items being exigible to tax, they should be both in registered brand name and put in unit container.

 

 

The phrase “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre- determined quantity or number, which is indicated on such package[Explanation (i) of 1/2017-CTR]

 

Comments: Hence if quantity held in package is not indicated on the package, still tax rate shall be NIL.

 

The phrase “registered brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999 [Explanation (ii) of 1/2017-CTR]

 

Comments:

  1. Indication of identity also gets covered
  2. Name of mark registered in foreign country is not covered above
  3. Name or mark registered under Copy rights Act is not covered.

 

GST Council Decision dated 09-09-2017

The issue of avoidance of 5% GST on pulses, cereals and flours, put up in unit container and bearing a registered brand name, was also discussed by the GST Council. After detailed deliberations, the Council recommended that the following amendments may be made to the existing Notifications, so as to provide that:

 

1) A brand registered as on 15.05.2017 shall be deemed to be a registered brand for the purposes of levy of 5% GST, irrespective of whether or not such brand is subsequently deregistered.

 

2) A brand registered as on 15.05.2017 under the Copyright Act, 1957 shall also be treated as a registered brand for the purposes of levy of 5% GST.

 

3) A brand registered as on 15.05.2017 under any law for the time being in force in any other country shall also be deemed to be a registered brand for the purposes of levy of 5% GST. [Hence brands registered in foreign country shall also be covered under registered brand name]

 

4) A mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name for the purposes of levy of 5% GST.

 

Press Release dated 20-09-2017

–         Notifications for giving effect to above are expected to be issued on 22nd September 2017

–         5% rate against name or mark shall not apply if the person concerned voluntarily foregoes any actionable claim or enforceable right on such brand name, subject to the conditions that he:

a) files an affidavit to the effect that he is voluntarily foregoing his actionable claim or enforceable right on such brand name with the jurisdictional Commissioner of Central Tax or State Tax, or the jurisdictional officer of Union Territory Tax, as the case may be, and

b) prints in indelible ink, both in English and local language on each such unit container, that in respect of brand name printed on the unit containers he has voluntarily foregone his actionable claim or enforceable right.

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Is ‘lucky draw’ eligible to exemption from GST?

Lucky draw is a game of chance and schedule III identifies ‘lottery and bingo’ as the only taxable supplies. As such, lucky draw is not taxable but the prize (if not in money) will be liable to tax as there is consideration though not in monetary form

(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Goods – FAQ NO. 31)

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Why are exemptions to fruits and vegetables given HSN chapter-wise instead of blanket exemption?

Since HSN based classification is adopted, exemption must be clearly provided so that even minor differences do not cause distortion in the scope of any exemption.

For example, leguminous vegetables may need to be exempted when dried and supplied but other vegetables may need to be exempted when they are fresh or chilled.

(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Goods – FAQ NO. 26)

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What does ‘goods of seed quality’ mean

Seeds are those parts of the plant that can germinate without debris, without infections and give rise to another plant of same species & sold ultimately to farmers. The seeds are often consumed. In order to differentiate between grain that is not suitable for germination or not intended for germination, exemption entries qualify the grain with the words ‘of seed quality’.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION ON SUPPLY OF GOODS : FAQ NO. 25)