Fair Price Shops Supplying Essential Commodities To Ration Card Holders Are Not Liable To Charge GST To The State Government: West Bengal AAR
The West Bengal Authority of Advance Ruling (AAR) has ruled that Fair Price Shops (FPS) supplying essential commodities, specifically Super Kerosene Oil (SKO), under the Public Distribution System (PDS) to ration card holders are not liable to charge GST to the State Government.The bench of Sarthak Saxena and Joyjit Banik has observed that Entry 11A of Notification No. 12/2017-Central Tax...
The West Bengal Authority of Advance Ruling (AAR) has ruled that Fair Price Shops (FPS) supplying essential commodities, specifically Super Kerosene Oil (SKO), under the Public Distribution System (PDS) to ration card holders are not liable to charge GST to the State Government.
The bench of Sarthak Saxena and Joyjit Banik has observed that Entry 11A of Notification No. 12/2017-Central Tax (Rate), which offers a nil tax rate for FPS supplying services to the state government against commission or margin, does not apply since no consideration is provided by the government and the entire consideration is paid by ration card holders.
The applicant is in the business as a holder of a licence issued by the West Bengal Government, authorising him to carry on trade in Super Kerosine Oil, which is issued by the Department of Food and Supplies, Government of West Bengal.
The applicant sought an advance ruling on the issue of whether the applicant, being a Fair Price shop, is liable to charge GST from the State Government against the supply made by them.
Yet another issue raised was whether the other charges like dealer commission, dealer Transport Charges, Stationery Charges, H&E loss, etc. would be chargeable to GST or treated as exempt. Whether the supply of "S.K.Oil" along with charges would be treated as a composite supply in which the principal supply would be the supply of "S.K.Oil".
The AAR held that no supply is made by the applicant to the State Government. In the absence of any supply being made to the State Government, no tax would be leviable, and thus no tax should be charged to the State Government.
The Authority clarified that other charges, such as dealer commissions, transport charges, stationery charges, and H&E losses, will be subject to GST because they are considered a part of the value of the supply under Section 9(1).
Applicant’s Name: Chanchal Saha
Date: 26.06.2023