Maharashtra Authority for Advance Rulings (AAR) under GST

Source: GST Sutra

Maharashtra AAR: Education/Training provided through co-operative training centres/district co-operative boards, not exempt

• Maharashtra AAR held that activity of applicant, a state level apex training institute, conducting education and training programs through its 13 co-operative training centres and 33 district co-operative boards as per statutory requirement of Maharashtra Co-operative Societies Act, 1960 is covered within the scope of services, therefore liable to GST.
• It observed that the applicant is neither providing any services to the Central Govt., State Govt., Union Territory administration under any training programme nor is the expenditure borne by Central Govt., State Govt., Union Territory administration.
• It noted that applicant is funded by fees received from societies for the training of their members and that applicant cannot be considered as an educational institution providing services to its students, faculty, and staff, accordingly, supply of services by them to members of cooperative societies is not exempt under Sr. No. 66(a) of Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate).
• It found that Maharashtra Societies Act provides for guidelines which are mandatory for each and every co-operative society in Maharashtra and obligation to see that such training is provided to its members are on the co-operative societies and applicant provides training only to those societies who pay an annual fee to them.
• It held that the applicant is supplying services to their member societies against a consideration received from them in the form of annual fee and their supply is in furtherance of business as defined u/s 2(17)(e) of CGST Act, 2017 which covers “provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members”.

Maharashtra AAR: Lottery distributor/agent procuring tickets from other State Govt. liable to GST under Reverse Charge Mechanism (RCM)

• Maharashtra AAR held the applicant i.e. lottery distributor or agent liable for payment of IGST on reverse charge basis under Serial No. 5 of Notification No. 4/2017- Integrated Tax.
• Perusing the agreement with organizing State, it observed that applicant is acting as a distributor or marketing agent of lottery schemes organized by State Govt. of Mizoram and procures online tickets from organizing state for distribution across Maharashtra which are sold through a chain of dealers/sales terminals of applicant across Maharashtra.
• It explained that supplier of the lottery is State Govt. of Mizoram which is outside Maharashtra and recipient of supply (applicant) in the form of lottery, is located in Maharashtra, therefore, the transaction shall be treated as ‘inter-state supply’ as per provision of Section 7(1) of IGST Act, 2017.

Maharashtra AAR: Duty-Free Import Authorization (DFIA), different from ‘Duty Credit Scrips’, liable to GST

• Maharashtra AAR held that Duty-Free Import Authorization (DFIA) licenses, issued to allow duty-free import of inputs that go into the manufacture of products that are exported, is covered under HSN code 4907 and shall attract applicable GST.
• It clarified that DFIA cannot be considered as ‘Duty Credit scrip’ as envisaged under Sr.  No. 122A of Notification No. 1/2017-Central Tax (Rate) inserted vide Notification No. 35/2017-Central Tax(Rate) even though it falls under CTH 4907.
• It observed that, as per Para 3.02 of FTP, Duty Credit Scrips are granted as rewards under MEIS and SEIS and can be used to pay various duties/taxes to Central Govt. whereas “there is a lot of difference between Duty Credit Scrips and DFIA”.
• It rejected applicant’s plea that both (Duty Credit Scrips and DFIAs) are issued as an export incentive and therefore, it does not matter that former can be used for payment of specified duties and latter is a duty remission.

It remarked, “When the FTP itself has segregated the two in different Chapters with different procedures, it would not be proper to consider the two schemes as one and the same”.