Page 205 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : MEGHA AGROTECH PVT. LTD. 451
sidy received from transaction value or value of taxable supply - Question of
entitlement of refund does not arise. - As per sub-section (1) of Section 15, it is very
clear that the value of supply is the transaction value and the transaction value is defined
as the “price actually paid or payable for the said supply of goods or services or both
where the supplier and the recipient are not related and the price is the sole consideration
for the supply”. In the pertinent case, it is clearly evident that the applicant and the
farmer are not related persons and the price is payable by the farmer irrespective of the
fact that he receives assistance from the Government Department or not or whether the
Bank makes the payment or not. The consideration of the contract is not fixed taking into
the account the amount receivable by the farmer as financial assistance and the entire
amount is invoiced. Hence price is the sole consideration for supply and the entire invoice
value would be the transaction price. The value of supply shall include the subsidies di-
rectly linked to the price, excluding subsidies provided by the Government. The financial
assistance provided by the Government is to the farmer to enable him to afford the facility
and Government is not making payment to the applicant vendor nor the amount receiva-
ble by the farmer has any bearing on the price of the supply. If the subsidies provided by
the Government is directly linked to the price, then the same would be excluded from the
value of taxable supply. [paras 6.3, 6.4, 7]
Ruling in favour of assessee
DEPARTMENTAL CLARIFICATION CITED
Karnataka Agriculture Department Circular No. GST/2018-19/2019-20, dated 8-11-2019 .......... [Para 3]
REPRESENTED BY : Shri Radhakrishna K.B., CA & DAR, for the
Assessee.
[Order]. - M/s. Megha Agrotech Private Limited, #196, Bannerghatta
Road, Arekere, Bengaluru-560076 (hereinafter called the ‘Applicant’), having
GSTIN Number 29AANCA2059B1ZS, have filed an application for Advance Rul-
ing under Section 97 of the CGST Act, 2017 and Section 97 of the KGST Act, 2017,
in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST
Act and the KGST Act.
2. The Applicant is a private limited company and is registered under
the Goods and Services [Tax] Act, 2017. The applicant has sought advance ruling
in respect of the following question :
(a) Whether under Section 15(2)(e) of CGST Act, for calculating “value
if taxable supply”, the subsidy amount granted to the farmer by
Horticulture/Agriculture/Sericulture Department of Government
of Karnataka under PMKSY Scheme or any other Central/State
Government approved schemes but disbursed to the supplier to be
treated as “subsidy” in the hands of the supplier and to be excluded
while ascertaining the “transaction value”?
(b) Whether the question of inclusion or exclusion of subsidy amount
in the value of taxable supply would arise under Section 15(2) of the
CGST Act, when such subsidy is not impacting the transaction val-
ue, which is price actually paid or payable for the supply of goods
by the customer i.e., farmers and when the subsidy is disbursed by
Horticulture/Agriculture/Sericulture Department to the supplier
on behalf of recipient of the supply (farmers)?
(c) Whether supplier would be entitled to refund of input tax credit ac-
cumulation, which may arise if subsidy is not treated as part of tax-
able value?
GST LAW TIMES  21st May 2020  205