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SGST Advance Ruling Authority

GST – Tamil Nadu AAR – Scope of Supply - Barter exchange, HSN Codes for Scrap, E-way bill requirement, Job work - Applicant is engaged in the business of crafting silver products using raw materials like silver and copper. They purchase silver bars from vendors outside Tamil Nadu, process them along with copper, and fashion them into silver ornaments. Sometimes they also outsource these processes through job work - Does barter exchange apply to B2B transactions where payments are made without the involvement of bank transactions, specifically, is the exchange of silver scrap for finished ornaments under GST laws considered a supply, despite the absence of monetary payments – HELD - The barter system is covered under the scope of 'supply' under Section 7 of the CGST Act, 2017 and the exchange of silver scrap for finished ornaments will be considered a 'supply' despite the absence of monetary payments. The definition of 'supply' under the CGST Act includes all forms of supply such as sale, transfer, barter, exchange, etc. made or agreed to be made for a consideration – Further, the Schedule I to the CGST Act, 2017, specifies activities to be treated as supply even if made without consideration - Barter system is covered under the scope of ‘supply’ and specifically exchange of silver scrap for finished ornaments will be considered a ‘supply’ under the GST law, despite the absence of monetary payments – Ordered accordingly - If Job Work is performed by an unregistered individual, does RCM apply. Additionally, does RCM cover job work provided by individuals to proprietorship concerns – HELD - Since 'job work' is not included in the list of activities/situations that warrant payment of GST under the Reverse Charge Mechanism as per the relevant notification, the question of RCM applicability in such cases does not arise - As job-work does not attract RCM, the question of answering the said query does not arise - What are the appropriate HSN codes for scrap, melted scrap bars, melted rods and melted kacha – HELD – The applicable HSNs are: Silver Scrap – 7112, Melted scrap Bars – 7112, Melted Silver Rods – 7106, Melted ‘Kacha’ (Imperfect Silver) – 7106 - Is E-way bill mandatory for purchase and sale of silver scrap, silver ornaments and silver fine – HELD - E-way bill is not mandatory for the movement inter-state and intra-state involving purchase and sale of silver scrap, silver ornaments and silver fine - In situations involving delivery challan for supply on approval, job work and repair when is an e-way bill required – HELD - E-way bill is not mandatory for the movement of goods in question in situations involving supply on approval, job work and repair of silver bars and ornaments.
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