Recent advance rulings under the GST Law
Summary
The Authority for Advance Ruling (AAR) constituted under the Goods and Services Tax (GST)
Law has recently pronounced advance rulings clarifying certain positions on the applicability of
GST on supply of goods from retail outlets in international airports, taxability of construction
services under GST, exemptions to education services, taxability of supply of food and
beverages to SEZs and Railways and exemption on non-branded cereals and pulses.
Issues considered and AAR's decision
1. Rod Retail Pvt. Ltd. AAR Delhi1
Issue Held by AAR
Whether the supply of goods to Such supply cannot be treated as `export' or `zero
international outbound passengers, rated supply' and GST is payable at the
holding international boarding passes, applicable rates.
from retail outlets located in - As per GST Law, goods are said to be
international airports and claimed to exported only when they cross the territory of
be beyond the Customs Frontiers of India4.
India, should be considered as zero - Goods cannot be said to be exported merely
rated supply2, being export of goods3, on crossing the Customs Frontier of India5.
or subjected to GST? - When goods are exported by air, the export
will be completed only when goods cross the
airspace limits of the territory or the territorial
waters of India.
- Outlets are located at the security hold area of
international airports, which is not outside
India but is within the territory of India. Hence,
the applicant is not taking goods out of India
and the supply cannot be treated as `export'
or `zero rated supply'.
1 AAR Delhi No.01/DAAR/2018 dated 27 March 2018
2 As defined under section 2(23) of Integrated Goods & Services Act, 2017 (IGST Act)
3 As defined under section 2(5) of IGST Act
4 As defined under sections 2(56) of CGST Act and 2(27) of Customs Act, 1962
5 According to section 2 (28) of the Customs Act, 1962 (52 of 1962) in relation to the Customs Frontier of India under
IGST Act, `Indian customs waters' means the waters extending into the sea up to the limit of contiguous zone of India
under section 5 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act,
1976 (80 of 1976) and includes any bay, gulf, harbour, creek or tidal river.
2. Shri Sanjeev Sharma AAR Delhi 6
Issue Held by AAR
Whether GST is applicable on the GST is applicable on two-thirds of the total
sale of: amount. The rate of GST is 18 per cent based on
- undivided share in land and the following:
- superstructure (under - Sale of land is specifically excluded from the
construction)? scope of supply under GST and hence GST is
not applicable on it.
If yes, what is the tax rate and value - However, as per GST Law7, construction
on which tax is applicable? activity is treated as supply of services.
- The supply in the given case is a composite
supply8 consisting of three components,
namely (i) land, (ii) goods and (iii) services.
Land and its superstructure become
inseparable and cannot be sold individually.
- In such a scenario, since GST is not
applicable on land, the value of land has to be
excluded from the taxable value.
- As per GST Notification9, the deemed value of
land has been fixed at one-third of the total
amount.
3. Simple Rajendra Shukla AAR Maharashtra 10
Issue Held by AAR
Whether private coaching services for Education services are taxed at the rate of 18 per
entrance examination come under the cent under GST.
ambit of GST ? - However, there is a GST exemption for the
education services provided by/to an
educational institution as defined under the
Notification11.
- Private tutorial coaching is not covered under
the said definition of `educational institution'.
- Thus, GST is applicable on these services.
4. Gogte Infrastructure Development Corporation Limited AAR Karnataka12
Issue Held by AAR
Whether hotel accommodation and In this case, place of supply shall be the hotel
restaurant services provided within premises which is outside the SEZ. Thus, the said
the premises of a hotel which is services shall be an `intra-state' supply and
outside an SEZ, to employees and taxable under GST.
guests of SEZ units, can be treated as
6 AAR Delhi No.03/DAAR/2018 dated 28 March 2018
7 Schedule II of CGST Act, 2017
8 As mentioned in Section in 8(a) of the CGST Act, 2017
9 As per Central Tax Notification no. 11/2017 (Rate) dated 28 June 2017 issued by the Central Government as per
powers laid down under Section 15 (5) of the CGST Act, 2017 regarding value of taxable supply
10 AAR Maharashtra No. GST- ARA-06/2017/B- 05 dated 09 March 2018
11 As per Central Tax Notification no. 12/2017 (Rate) dated 28 June 2017 issued under Section 11 of the CGST Act,
2017 regarding powers given to Central Government to grant exemption from tax
12 AAR Karnataka No. KAR ADRG 2/2018 dated 21 March 2018
supply of goods and services to SEZ - As per the provisions of GST Law13, only
units and thus as zero rated supply? supply of goods and services for authorised
operations of an SEZ are treated as supplies
to SEZ and can be zero rated.
- Place of supply of services by way of lodging
and accommodation shall be the location of
the immovable property. Also, place of supply
of restaurant services shall be the location
where the services are performed.
5. M/s Deepak & Co. (AAR Delhi; No.02/DAAR/2018 dated 28 March 2018)
Issue Held by AAR
What is the applicable tax rate on Supplying food/beverages on board train or in food
activities of supplying: stalls on the railway platforms is considered as a pure
supply of goods. It does not have a service element
- food/beverages on board trains and would not be treated as a composite supply of
and on railway platforms as per services. A train is a mode of transport and it cannot
the agreements with IRCTC/Indian be called a restaurant.
Railways?
- newspapers in trains? Taxability would be as under:
Supply of goods, ie food, bottled water etc., shall
be charged to GST on individual values of goods
(excluding the service charges) at their respective
applicable rates.
Service charges invoiced separately are classified
under the head `catering services in train' and
GST is charged at the applicable rate.
Supply of newspapers invoiced separately shall
be taxed at 'nil' rate of GST.
6. Aditya Birla Retail Limited AAR Maharashtra 14
Issue Held by AAR
Does declaring only the name of the Supply of goods at exclusive stores would amount
company under `Manufactured and to supply under a brand name.
packaged by' or `Marketed by' as per Supply of such goods would not fit into the
the statutory requirements, without exemption given to non-branded items.
declaring the registered - Certain cereals and pulses supplied by the
trademarks/logo on packages sold applicant are exempt from GST subject to
from exclusive stores, constitute conditions.
'supply other than those bearing a - Exemption is only to such items other than
brand-name' and qualify for GST those packaged in unit containers and bearing
exemption? a brand name (ie non-branded items).
13 Section 16(1)(b) of IGST Act, 2017 read with Rule 46 of CGST Rules, 2017
14 AAR Maharashtra No. GST- ARA-06/2017/B-05 dated 09 March 2018
Our comments
In complex situations, where there is ambiguity on tax positions, taxpayers may seek advance
rulings to gain clarity and avoid prolonged litigation. Advance rulings are binding only on the
respective applicant and concerned jurisdictional GST officer. If an applicant has a divergent
view on the AAR's decision, it may appeal to the Appellate Authority for Advance Ruling.
However, given the nascent stage of the GST regime, the AAR's decisions can help as a
reference point for other taxpayers and may be used as a guidance for adopting tax positions.
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