30 December 2018
XYZ (Trader in Maharashtra) is receiving filled cylinders of “Refrigerant Gas” from its own manufacturing unit at Gujarat. XYZ is re-selling these filled cylinders to the customers. The customer is sending back the empty cylinder to XYZ which in turn XYZ is sending back to their unit in Gujarat. Is XYZ liable to pay GST on the empty cylinders send back to Gujarat from their Maharashtra unit?
31 December 2018
Thanks for your kind advice sir. But my views on the same are given below: Following are the provisions under GST law for the above transaction: As per Article 366(12A) of Constitution of India inserted w.e.f. 16-9-2016, Goods and Services Tax means a tax on supply of goods or services, or both, except taxes on supply of alcoholic liquor for human consumption. The word used is 'supply' and not 'sale' or 'manufacture'. 'Consideration' is not required for supply. Section 9(1) of CGST Act, 2017 is the charging section for CGST. The section reads as follows – there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
Identical definition is given for inter – state supply under Section 5(1) of IGST Act, 2017. As per Section 7(1)(c) of CGST Act, 2017, ‘Supply’ includes the activities specified in Schedule I, made or agreed to be made without a consideration. As per Schedule – I (2) of Section 7, supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business, will be treated as supply, even if made without consideration. Section 25(4) of CGST Act states that, a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. Therefore, establishments of same person with distinct GST Registration Numbers will be treated as 'distinct persons'. Thus, inter-state stock transfers or branch transfer will be subject to GST. Even intra-state stock transfer or branch transfer will be subject to GST if there are separate GST registrations. In view of the facts explained above, XYZ needs to stock transfer the empty cylinders to their Gujarat unit under the cover of a ‘Tax Invoice’ by charging GST on value of the cylinders.
31 December 2018
See the link GST not required on empty cylinder. https://www.google.com/url?sa=t&source=web&rct=j&url=https://m.youtube.com/watch%3Fv%3DejqCVMIVBZI&ved=2ahUKEwic4NyCsMnfAhUEsI8KHSNkBjwQjjgwBXoECAUQAQ&usg=AOvVaw14rBDUTfpqy87b-dhjsghV&cshid=1546235650998
31 December 2018
Sir, thanks for your quick response. But the exemption is only for LPG. The empty cylinders under discussion are refrigerent cylinders where the gas is used in Automobiles, refrigerators, air conditioners etc. Therefore, in my view, the said notification will not be applicable for this transaction. Your comments sir.
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