The Authority of Advance Ruling, West Bengal comprising of Sarthak Saxena and Joyjit Banik held that GST is exempted on composite supply of atta to state govt. if goods value is less than 25%.
BACKGROUND
The Applicant is a flour miller, engaged in providing services of crushing wheat provided by the State Government, into fortified atta which in turn is supplied by the State Government through Public Distribution System. The ownership of wheat or atta is never transferred to the Applicant.
ISSUE RAISED
- What is the value of supply of services provided by the applicant Company to the State Government?
- What is the rate of tax applicable on the value of supply? What components are to be included in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018- Central Tax (Rate)?
RULING
The AAR held that the value of supply shall be the consideration in money as well as non-cash consideration, as discussed. The composite supply of services by way of milling of food grains into flour (atta) to Food & Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for GST exemption under entry serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the value of goods involved in such composite supply does not exceed 25% of the value of supply.
Applicant Name: Haldia Agro Private Limited
Citation: WBAAR 08 of 2023
