Levy of GST— In the instant case, applicant is involved in the business of forest plantation, tapping, storage and sale /supply of Lisa/Resin etc.
It is observed that, the extraction of Oleo Resin (Lisa) from pine trees involves human endeavour and an elaborate and well laid procedure has to be followed for such extraction/production. After such extraction, the Lisa/Resin is then transported to the Motor Road Depot (Godown) and in both the categories the cost of transportation and other incidental expenses are borne by the contractor/ individual permit holder.
Once the Lisa/Resin is deposited by the contractor/ individual permit holder, total control and supervision of Lisa/Resin is with the applicant.
The transportation of Lisa/ Resin from the Motor Road Depot to Rail Head Depot (Kathgodam) is done by the designated transporter, which is appointed through a separate tendering process. We also observe that in the instant application, the applicant has declared that the applicable GST on Lisa/Resin is charged and collected by them at the time of Sale of Lisa/Resin (through open auction) at Rail Head Depot (Kathgodam) and deposited to the Govt, exchequer. We find that it is not disputed that the ownership of collected Lisa/Resin is with the applicant.
the applicant has sought advance ruling on the following questions:-
1. Does the entire work is liable under GST?
2. Who is liable for GST, the department or the bidder?
3. What will be the applicable rate of GST for such activity?
4. What will be the classification of HSN/SAC code for such activity?
5. At which point/time of supply, GST is liable to be paid?
6. On which amount GST should be paid? Whether the taxable amount will include all charges i.e. loading, unloading, tapping & transportation charges?
7. Whether GST TDS (@2% applicable) is liable to be deducted by the department from the payment made to bidder?
8. Does every contractor should be registered under GST working with the department for any types of activities?
9. What will be condition for deduction of GST TDS, if bidder has a contract less than 10 Lakh or unregistered person?
Held that—
1. all the activities are liable to GST.
2. a) The contractor, undertaking tapping /extraction and collection of Lisa/Resin, from the Chir/Pine trees located on the reserved forest, van panchayat and civil forest, is liable to payment of GST on composite supply.
b) An individual permit holder, undertaking tapping /extraction and collection of Lisa/Resin, from the Chir/Pine trees located on the private (Naap) land, is liable to payment of GST on composite supply.
3 The activity by contractor / individual permit holder is a composite supply and supply of goods i.e. Oleo Resin (Lisa) is the principal supply hence GST @ 5 % (2.5% + 2.5%) is payable.
4. Classification of HSN/SAC code is as under:
Services : Goods transport service - 9965
Sale : Oleo Resin (Lisa) - 13019049
5. The applicant is liable to pay applicable GST on Lisa/ Resin at the time of ' issue of invoice by them i.e. at the time of final sale through open auction.
6 The applicable GST on Lisa/Resin falling under HSN 13019049, is to be paid, ' on the value arrived at the time of final sale (after open auction) and all the expenses incurred from tapping /extraction to final sale including all incidental expenses incurred by the applicant, forms the part of taxable value and no deductions, of any type is available in the taxable value.
7. The TDS as applicable under the provisions of law has to be deducted by the applicant, being a Government body while making payments, for the supply of goods as well as services.
8. Yes, every contractor/individual permit holder is required to get registered as per section 22 of the CGST Act, 2007, however, the contractors / individual permit holders, whose aggregate turnover (annual turnover) is within the threshold exemption limit, they are not required to get registered in view of Section 23 of the Central Goods and Service Tax Act, 2017.