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III. GST Case Law:
1. M/s CMS Info Systems Limited, Order No. MAH/AAAR/SS-RJ/04A/2018-19, Date: 31.10.2019
Facts of the Case
1. The Appellant is having cash management network pan India. During the course of providing the cash management services, the appellant is engaged in the following activities:
- Providing ATMs and installing the same at various locations across India.
- Managing cash circulation through transporting cash from currency chest to bank branches.
- cash pick-up and delivery from and to dedicated banks.
2. Such transportation of cash is done through the security vans popularly known as "cash carry vans". The appellant purchases raw motor vehicles and requisite fabrication, get them converted to cash carry vans. The appellant also pays GST on fabrication. For this purpose, the appellant purchases motor vehicle and pays GST. Credit of GST is not availed by the appellant presently. While purchasing Cash Carry Vans during pre-GST era, the appellant has paid the Central Excise Duty as well as Value added Tax.
3. When these vans cannot be used further, the appellant sells these motor vehicles asscrap. In certain cases, instead of purchasing motor vehicles, the appellant prefers to hire these motor vehicles
4. The Appellant had approached the Advance Ruling Authority (AAR) for seeking an advance ruling under Section 97(1) of the CGST Act, in respect of the following questions:
- I. Whether supply of such motor vehicles as scrap after its usage can be treated as supply in the course or furtherance of business and whether such transaction would attract GST? If yes, please provide the rate of GST and/or Compensation Cess.
- II. If answer to Question I is in affirmative, whether Input Tax Credit is available to CMS Info Systems Limited on purchase of motor vehicles i.e. cash carry vans which are purchased, used for cash management business and supplied post usage as scrap.
Order passed by Authority for Advance Ruling
5. Regarding the issue raised in the Question I of the application, it is held that supply of motor vehicles i.e. cash carry vans as scrap after its usage will be treated as supply in the course or furtherance of business in terms of the provision of Section 7 of the CGST Act, 2017 and such transaction would attract GST as the disposal of cash carrying van is a transaction in connection with or incidental to or ancillary to business in so much as the sale proceeds of such vans is treated as income and reflected in P&L Account, there by marking such transaction as taxable supply attracting GST thereon. As regards, the rate of GST leviable on such supply, the applicant has not provided any invoice or has informed tariff heading of these goods. Further, it is also not clear whether after sale these would be usable as vehicles or would be fully scrapped. As the said goods whether after sale these would be usable as vehicles or would be fully scrapped. As the said goods do not appear in the notification no. 2/2017-C.T. (Rate) which exempts the goods from the levy of GST, these taxable supplies would be taxed at rates mentioned in the Notification No. 1/2017-C.T. (Rate), which may be referred by the applicant accordingly.
Regarding the issue raised in the Question II of the application, wherein it was asked that if the sale of the cash carry van, as scrap after its usage, held a taxable supply, whether Input Tax Credit is available to CMS Info Systems Limited on purchase of such motor vehicles i.e. cash carry vans which are used for cash management business and supplied, post usage, as scrap, there was difference in opinion on this particular issue between two members of the Advance Ruling Authority. Therefore, the matter was referred to the Appellate Authority for Advance Ruling for giving the appropriate ruling in this regard.
Discussion
Moneys are not used as legal tender at any stage of the services rendered by them, and hence those cannot be considered as money in accordance with its definition provided under section 2(75) of the CGST Act, 2017.
HELD
Input Tax Credit against the GST paid on the purchase, and fabrication of the motor vehicles, used for carrying cash and bullions, is available to the Appellant.
(Please click here for Order)
[ Contribution by CA. Vijay Gupta] |
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