Circular No. 47/21/2018-GST
F. No. CBEC- 20/16/03/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 08th June, 2018
To,
The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)/
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarifications of certain issues under GST– regarding
Representations
have been received seeking clarification on certain issues under the GST laws.
The same have been examined and the clarifications on the same are as below:
| Sl. No. |
Issue |
Clarification |
| 1 | Whether moulds and dies owned by Original Equipment Manufacturers (OEM) that are sent free of cost (FOC) to a component manufacturer is leviable to tax and whether OEMs are required to reverse input tax credit in this case? |
1.1 Moulds and dies owned
by the original equipment manufacturer (OEM) which are provided to a
component manufacturer (the two not being related persons or distinct
persons) on FOC basis does not constitute a supply as there is no
consideration involved. Further, since the moulds and dies are provided
on FOC basis by the OEM to the component manufacturer in the course or
furtherance of his business, there is no requirement for reversal of
input tax credit availed on such moulds and dies by the OEM. |
| 2 | How is servicing of cars involving both supply of goods (spare parts) and services (labour), where the value of goods and services are shown separately, to be treated under GST? |
2.1 The taxability of supply would have to
be determined on a case to case basis looking at the facts and
circumstances of each case. 2.2 Where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately. |
| 3 | In case of auction of tea, coffee, rubber etc., whether the books of accounts are required to be maintained at every place of business by the principal and the auctioneer, and whether they are eligible to avail input tax credit? |
3.1 The requirement of maintaining the books
of accounts at the principal place of business and additional place(s)
of business is clarified as below: (a) For the purpose of auction of tea, coffee, rubber, etc, the principal and the auctioneer may declare the warehouses, where such goods are stored, as their additional place of business. The buyer is also required to disclose such warehouse as his additional place of business if he wants to store the goods purchased through auction in such warehouses. For the purpose of supply of tea through a private treaty, the principal and an auctioneer may also comply with the said provisions. (b) The principal and the auctioneer for the purpose of auction of tea, coffee, rubber etc., or the principal and the auctioneer for the purpose of supply of tea through a private treaty, are required to maintain the books of accounts relating to each and every place of business in that place itself in terms of the first proviso to sub-section (1) of section 35 of the CGST Act. However, in case difficulties are faced in maintaining the books of accounts, it is clarified that they may maintain the books of accounts relating to the additional place(s) of business at their principal place of business instead of such additional place(s). (c) The principal and the auctioneer for the purpose of auction of tea, coffee, rubber etc., or the principal and the auctioneer for the purpose of supply of tea through a private treaty, shall intimate their jurisdictional officer in writing about the maintenance of books of accounts relating to the additional place(s) of business at their principal place of business. 3.2 It is further clarified that the principal and the auctioneer for the purpose of auction of tea, coffee, rubber etc., or the principal and the auctioneer for the purpose of supply of tea through a private treaty, shall be eligible to avail input tax credit subject to the fulfilment of other provisions of the CGST Act read with the rules made thereunder. |
| 4 | In case of transportation of goods by railways, whether goods can be delivered even if the e-way bill is not produced at the time of delivery? | As per proviso to rule 138(2A) of the Central Goods and Services Tax Rules, 2017 (CGST Rules for short), the railways shall not deliver the goods unless the e-way bill is produced at the time of delivery. |
| 5 | Whether
e-way bill is required in the following cases- (i) Where goods transit through another State while moving from one area in a State to another area in the same State. (ii) Where goods move from a DTA unit to a SEZ unit or vice versa located in the same State. |
(i) It may be noted that e-way bill
generation is not dependent on whether a supply is interState or not,
but on whether the movement of goods is inter-State or not. Therefore,
if the goods transit through a second State while moving from one place
in a State to another place in the same State, an e-way bill is required
to be generated. (ii) Where goods move from a DTA unit to a SEZ unit or vice versa located in the same State, there is no requirement to generate an eway bill, if the same has been exempted under rule 138(14)(d) of the CGST Rules. |
2. It is requested that suitable trade notices
may be issued to publicize the contents of this Circular.
3. Difficulty if any, in the implementation of this Circular may be brought to
the notice of the Board. Hindi version will follow.
(Upender Gupta)
Commissioner (GST)