Circular No. 47/21/2018-GST
F. No. CBEC- 20/16/03/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 08
th
June, 2018
To,
The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)/
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarifications of certain issues under GST– regarding
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.
No.
Issue Clarification
1 Whether moulds and dies owned by
Original Equipment Manufacturers
(OEM) that are sent free of cost
(FOC) to a component manufacturer
is leviable to tax and whether OEMs
are required to reverse input tax
credit in this case?
1.1 Moulds and dies owned by the original
equipment manufacturer (OEM) which are
provided to a component manufacturer (the
two not being related persons or distinct
persons) on FOC basis does not constitute a
supply as there is no consideration
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
both supply of goods (spare parts)
and services (labour), where the
value of goods and services are
shown separately, to be treated
under GST?
2.1 The taxability of supply would have to be
determined on a case to case basis looking
at the facts and circumstances of each case.
2.2 Where a supply involves supply of both
goods and services and the value of such
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,
rubber etc., whether the books of
accounts are required to be
maintained at every place of
business by the principal and the
auctioneer, and whether they are
eligible to avail input tax credit?
3.1 The requirement of maintaining the books
of accounts at the principal place of
business and additional place(s) of business
is clarified as below:
(a) For the purpose of auction of tea,
coffee, rubber, etc, the principal and the
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
railways, whether goods can be
delivered even if the e-way bill is
not produced at the time of
delivery?
As per proviso to rule 138(2A) of the Central
Goods and Services Tax Rules, 2017 (CGST
Rules for short), the railways shall not deliver
the goods unless the e-way bill is produced at
the time of delivery.
5 Whether e-way bill is required in the
following cases-
(i) Where goods transit through
another State while moving from
one area in a State to another area in
the same State.
(i) It may be noted that e-way bill generation is
not dependent on whether a supply is inter-
State or not, but on whether the movement of
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
unit to a SEZ unit or vice versa
located in the same State.
(ii) Where goods move from a DTA unit to a
SEZ unit or vice versa located in the same
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.
(Upender Gupta)
Commissioner (GST)
