GST Authority for Advance Ruling has become fairly active recently with a slew of judgements coming in the last few days. We have compiled below the key judgements announced recently for quick reference.
- Sale of Duty Free Shops taxable under GST
The Delhi AAR has recently ruled that the sale of goods by the Duty Free Shops at international airports is taxable under GST. The Authority ruled that while such supply may be taking place beyond the customs frontiers of India under IGST Act butthe said Shops are within territory of India under the CGST Act. Consequently, sale of goods by such shops cannot be treated as export and hence chargeable to GST.
- Mandatory registration in case of RCM under 9(3)
West Bengal AAR has clarified that registration is required to be obtained even if the assessee has only exempt turnover but has liability under reverse charge under Section 9(3).
The Applicant is not required to be registered under the GST Act if he is not otherwise liable to pay tax under reverse charge under section 9(3) of the GST.
- Intermediary Services provided to University Abroad – Not Qualified as exports.
In the case of services for promotion and assistance in recruitment of students for a foreign university, the WB AAR has held that the applicant’s primary service is to recruit/enroll students for the foreign university. Promotion of courses is an incidental & ancillary activity to the principal supply and applicant is paid consideration in the form of commission based on performance in recruiting students, as a percentage of the tuition fee collected from the students
The applicant is an intermediary service provider hence place of supply should be according to Sec 13(8)(b) of the IGST Act 2017. Thus, place of supply falls within India and conditions of Export of services does not qualify and the transaction becomes taxable under the GST Act.
- No GST on goods brought and sold outside India
Kerala AAR has clarified that neither GST is leviable on sale of goods procured from other country and directly supplied to recipient country nor stored in warehouse of that country, as the goods are not imported into India at any point. The goods are liable to IGST when they are imported into India i.e. they are bought into Indian Territory.
- GST on food to employees from canteen in office premises
In its order, the AAR Kerala has clarified that even though there is no profit on the supply of food to employees, there is "supply" as provided in Section 7(1)(a) of the GST Act, 2017 and hence recovery of food expenses from the employees for the canteen services provided by company would come under the definition of 'outward supply' as defined in Section 2(83) of the Act, 2017, and therefore, taxable as a supply of service under GST.