462
June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 50Case Laws
rvices of resectioning of river Se
provided to Irrigation & Waterways
Directorate, exempt under GSTArihant Dredging Developers (P.) Ltd., In re
[2019] 106 taxmann.com 107 (AAR - West
Bengal)
The Irrigation & Waterways Directorate, Govt.
of West Bengal (hereinafter the recipient),
has awarded the Applicant a contract for
resectioning of river Jamuna. The application
has been filed for advance ruling on whether
the above supply by the applicant is exempt
from GST?
The Authority of Advance Ruling, West Bengal
has observed that as per the exemption noti-
fication under GST, the applicant is eligible
for such exemption on the above supply if
made as a pure service or composite supply
to government, local authority, governmental
authority or a government entity in relation
to any function entrusted to a panchayat or a
municipality under the Constitution of India.
In this case the recipient is a State Govern-
ment. The contract is meant for resectioning
of river Jamuna. The total contract value
includes the cost of services like loading and
unloading, transportation, the arrangement
of land, etc. It is clear from the description
of the work that it is a composite supply of
various services for supply of goods being
incidental is not accounted for separately in
price schedule.
Further, the recipient, i.e., Irrigation & Wa-
terways Directorate is engaged in the devel-
opment of irrigation and waterways, which
includes activities in relation to the function
entrusted to panchayat as per the Constitu-
tion of India.
Authority of Advance Ruling, West Bengal
held that the services of resectioning of
river provided to Irrigation & Waterways
Directorate clearly falls under the exemptionnotification under GST and hence these are
exempt from GST.harmada charges paid voluntarily D
by customers couldn’t be treated as
part of assessable value of goodsD.J. Malpani v. CCE [2019] 106 taxmann.
com 29 (SC)
The assessee manufactured and sold chewing
tobacco. It charged from the customers the
price of goods plus Dharmada, a charitable
donation. The revenue issued show cause
notices and demanded Excise duty for Dhar-
mada claiming it to be part of the price for
the sale of manufactured goods and included
in assessable value.
The Adjudicating Authority held that Dhar-
mada could not be considered as trading
receipt and was not a part of the assessable
value. Therefore, no duty was payable on
the component of Dharmada.
The Commissioner (Appeals), on an appeal
filed by the revenue department, held that
Dharmada was to be included in assessable
value and goods to be assessed on the basis
of their price plus Dharmada.
On appeal to the Supreme Court, the asses-
see contended that those receipts could not
be regarded as income of the assessee. The
Division Bench of the Supreme Court had
referred to the Larger Bench of this Court to
answer whether Dharmada collected by the
assessee which was an optional payment made
by the buyer could be considered as part of
the transaction value for the sale of goods?
The Supreme Court observed that Dharmada
was made voluntarily by the purchasers. As
per Central Excise Act, ‘Transaction value’
means the price actually paid or payable
for the goods and any additional amount
the buyer is liable to pay to the assessee or
anyone on his behalf in connection with the
sale. When an amount is paid as Dharmada
along with the sale price of goods, suchWEEKLY REVIEW