Circular No. 47/21/2018-GST [C10-1P4]

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. Issue Clarification No.

1 Whether moulds and dies owned by 1.1 Moulds and dies owned by the original Original Equipment Manufacturers equipment manufacturer (OEM) which are (OEM) that are sent free of cost provided to a component manufacturer (the (FOC) to a component manufacturer two not being related persons or distinct is leviable to tax and whether OEMs persons) on FOC basis does not constitute a are required to reverse input tax supply as there is no consideration credit in this case? 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.

1.2 It is further clarified that while calculating the value of the supply made by the component manufacturer, the value of moulds and dies provided by the OEM to the component manufacturer on FOC basis

shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer and thus, does not merit inclusion in the value of supply in terms of section 15(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act for short).

1.3 However, if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components. In such cases, the OEM will be required to reverse the credit availed on such moulds/ dies, as the same will not be considered to be provided by OEM to the component manufacturer in the course or furtherance of the former’s business.

2 How is servicing of cars involving 2.1 The taxability of supply would have to be both supply of goods (spare parts) determined on a case to case basis looking and services (labour), where the at the facts and circumstances of each case. value of goods and services are 2.2 Where a supply involves supply of both shown separately, to be treated goods and services and the value of such under GST? 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, 3.1 The requirement of maintaining the books rubber etc., whether the books of of accounts at the principal place of accounts are required to be business and additional place(s) of business maintained at every place of is clarified as below: business by the principal and the (a) For the purpose of auction of tea, auctioneer, and whether they are coffee, rubber, etc, the principal and the eligible to avail input tax credit? 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 As per proviso to rule 138(2A) of the Central railways, whether goods can be Goods and Services Tax Rules, 2017 (CGST delivered even if the e-way bill is Rules for short), the railways shall not deliver not produced at the time of the goods unless the e-way bill is produced at delivery? the time of delivery.

5 Whether e-way bill is required in the following cases-

(i) Where goods transit through (i) It may be noted that e-way bill generation is another State while moving from not dependent on whether a supply is inter- one area in a State to another area in State or not, but on whether the movement of the same State. 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 (ii) Where goods move from a DTA unit to a unit to a SEZ unit or vice versa SEZ unit or vice versa located in the same located in the same State. State, there is no requirement to generate an e- way 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.