INCLUSION OF REFURBISHMENT COST IN PURCHASE PRICE FOR MARGIN SCHEME UNDER GST

INCLUSION OF REFURBISHMENT COST IN PURCHASE PRICE FOR MARGIN SCHEME UNDER GST

RAJASTHAN APPELLATE AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Before the Bench of:

1. Sh. Satish Kumar Agrawal, Member (Central Tax)

2. Sh. Ravi Jain, Member (State Tax)

Case Title :- M/s Tej Kumar Jain

(GST AAAR RAJASTHAN)

Appeal No. RAJ/AAAR/APP/02/2021-22

Advance Ruling No. RAJ/AAR/2021-22/04 dated 25.08.2021

Date of Judgement /Order- 13th December 2021

IMPORTANT PARGRAPHS

Para No. 4.2.11. – Hence the appellant understands that the term price includes every amount paid or payable for the transaction of supply as a whole and includes any charges paid or payable in relation to the transaction and hence such amounts are included in value of virtue of Sec. 15(1) only.

Para No. 4.3.12. – That thus on basis of above it is evident that meaning of sale can be used as inference to arrive at meaning of purchase. In fact, normal meaning of the word ‘purchase’ is acquisition for money or for any consideration. That is the primary meaning. In Concise Oxford Dictionary, apart from the two meanings “buy, acquire”, another meaning given to the word “purchase” is “procure”. The word “procure” consists of much wider import than the word “purchase”. In the same dictionary, the word “procure” has been given the meaning as “obtained by care or effort acquire”

Para No. 4.4.10. – That hence when applicant would incur the cost towards the procurement it would pay GST (as maybe applicable) and may also pay GST while incurring the refurbishment cost, if applicable. However, since ITC is not available under the given notification hence if deduction of refurbishment expenses is not given then it shall lead to a situation of double taxation and hence would defeat the whole purpose of the notification as such.

PERSONAL HEARING

Para No. 5 – A virtual hearing in the matter was held on 17.11.2021. Sh. Yash Dhadda, Authorized Representative of the appellant has attended hearing on 17.11.2021. They reiterated the submissions already made under grounds of appeal.

ORDER

Para No. 6.9- Therefore, in view of the above discussion, we hold that from the plain reading of the explanation (ii) to the notification No. 8/2018 —Central Tax (Rate) dated 25th January, 2018/ it is noticed that the explanation (ii) clearly used the word ‘purchase price’ not the ‘purchase cost’ of the goods. It means only the amount paid at the time of purchase of used and old cars can be considered as ‘purchase price’ for the purpose of this notification.

Para No. 6.10- The appellant has also placed reliance on various case laws passed by various Advance Ruling authorities. We are of the opinion that each case has to be examined individually in the backdrop of several factors. Further, the appellant has also placed reliance of various case laws passed by courts related to other act. We observe that there is no need to discuss the same in view of clear provisions of CGST ACT.

Para No. 7- Accordingly, appeal filed by the appellant is disposed off in above terms.