Page 195 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : DEPUTY CONSERVATOR OF FORESTS, BANGALORE 521
Forest Department, does the same nil rate of SGST and CGST apply
to them too? If not, what would be the rate?”
Issue No. 2
“(a) In case of sale of forest produce or any other goods belonging to
Karnataka Forest Department, where the buyer is registered or is
based in and transports the goods to outside the State of Karnataka, what
should be charged under the CGST Act, 2017, (A) SGST and CGST
or (B) IGST?
(b) In case of forest produce or any other goods belonging to Karnataka
Forest Department, where the buyer is registered or is based outside
the State of Karnataka, but uses the goods within the State of Karna-
taka, what should be charged under the CGST Act, 2017, (A) SGST
and CGST, or (B) IGST?.”
5. The Advance Ruling Authority passed Advance Ruling Order No.
KAR ADRG 20/2019, dated 26-8-2019, wherein they ruled as follows :-
“(1) The operation of “logging” as described in Issue 1 of the application
would attract tax under the Goods and Services Tax Acts and it is
independent of the trees, whether planted by the Forest Department
or which grew out of natural regeneration.
(2) The transaction described in the application in Issue No. 2, is an in-
tra-State supply and attracts CGST and SGST and is independent of
where the goods are taken by the recipient after the supply is com-
pleted.”
6. The appellant is aggrieved by the ruling given in respect of logging
activities and has filed this appeal on the following grounds.
6.1 Logging operations amounts to forestry and the same attracts nil
rate of tax against entry Sl. No. 24 of Notification No. 11/2017-Central Tax (Rate),
dated 28-6-2017 as amended which pertains to support services to agriculture,
forestry, fishing, animal husbandry falling under Heading 9986. As per explana-
tion (iii) to the said entry, support services to forestry means
‘(iii) Carrying out an intermediate production process as job work in rela-
tion to cultivation of plants and rearing of all life forms of animals, except
the rearing of horses, for food, fibre, fuel, raw material or other similar
products or agricultural produce’
Therefore, the finding of the Advance Ruling Authority in para 5.8 of impugned
Ruling to the effect that activity of logging is not support service to forestry and
hence, is not covered under Entry No. 24 of Notification No. 11/2017-Central Tax
(Rate), dated 28-6-2017 is not correct/rational and the same is not in harmony
with the wordings of the Notification.
6.2. Further, the Hon’ble Advance Ruling Authority have made finding
to the effect that such logging service received by the Appellant Applicant is of
the nature of composite supply and the principal supply is covered under sub-
entry (ii) of Entry No. 26 of the Notification No. 11/2017-Central Tax (Rate), dat-
ed 28-6-2017 and therefore, the same is taxable under CGST at 9% and SGST at
9% and similarly, the same is taxable at 18% towards IGST, as is applicable. The
findings of the Hon’ble Advance Ruling Authority is not correct for the reason

GST LAW TIMES  23rd April 2020  315