Supply Of Precast Manhole Using The Steel And Cement Attracts 18% GST: Rajasthan AAR
The Rajasthan Authority of Advance Ruling (AAR) has ruled that the supply of precast manholes using steel and cement attracts 18% GST.The bench of Umesh Kumar Garg and Mahesh Kumar Gowla has observed that precast manholes and rises are movable property; hence, the supply of precast manholes and rises is a supply of goods and not a supply of services on the basis of the findings.The applicant,...
The Rajasthan Authority of Advance Ruling (AAR) has ruled that the supply of precast manholes using steel and cement attracts 18% GST.
The bench of Umesh Kumar Garg and Mahesh Kumar Gowla has observed that precast manholes and rises are movable property; hence, the supply of precast manholes and rises is a supply of goods and not a supply of services on the basis of the findings.
The applicant, M/s Natani Precast LLP, has been incorporated with the intention of manufacturing and supplying precast manholes and rises to various government and non-government entities. The supply of precast manholes requires inputs, raw materials, and consumables for their manufacturing.
The applicant sought an advance ruling on the issue of whether the supply of precast manholes is a supply of goods or services and the GST rate leviable on it.
Yet another issue raised was whether the price to be charged from the recipient, i.e., M/s Larsen & Toubro Ltd., by the applicant for the supply of precast manholes shall be transaction value in terms of Section 15(1) of the CGST.
In Section 15(1) of the CGST Act 2017, it is clear that the value of the supply of goods is called the transaction value. Further, under the same Section 15(1) of the Act, transaction value has been defined as the price actually paid or payable for the supply of goods, services, or both. However, the price, being the transaction value, is subject to two conditions. Firstly, the supplier and the recipient are not related. Secondly, price is the sole consideration for a supply.
The AAR held that the price to be charged from the recipient, i.e., M/s Larsen & Toubro Ltd., by the applicant for the supply of precast manhole shall not be transaction value in terms of Section 15(1) and 15(2) of the CGST, and material that is to be made available free of cost by the recipient and is not within the scope of the applicant for the supply of precast manhole shall form part of the transaction value for the purpose of levy of tax.
Applicant’s Name: M/s Natani Precast
Date: 22.03.2023