Page 207 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : MEGHA AGROTECH PVT. LTD. 453
it is only for administrative convenience, the disbursement is made
to suppliers of micro-irrigation systems and that also post certifica-
tion of installation of irrigation system by farmers, post receipt of
consent from farmer for disbursement of subsidy entitlement to ir-
rigation system supplier, etc. Therefore, when only for administra-
tive purposes, the subsidy is distributed to the suppliers, it cannot
be said that the subsidy is received by the supplier and/or it is
linked to price charged by the supplier.
(d) The applicant questions that in the event, it is decided that GST is to
be charged only on the non-subsidy portion, will the supplier be el-
igible to claim refund of unutilized input tax credit which may arise
if subsidy is not treated as part of taxable value and when in their
case, rate of tax on various inputs is higher than rate of tax on out-
put.
5. Sri Radhakrishna K.B., Chartered Accountant and duly authorised
representative of the above concern appeared and reiterated the submissions
made by the applicant in his application and also made the following submis-
sions :
(a) That the process of the sanction and receipt of payments are as
under :
(i) The eligible farmers applies to the Government Department
for the sanction of financial assistance under a scheme and
the applicant has no role to play in the said transaction. The
Department concerned would conduct a verification of the el-
igibility of the farmer for financial assistance and the appli-
cant has no role to play even in this process.
(ii) Once approved, the farmer approaches the applicant (vendor
of the materials) and obtains a quotation. In this issue, the list
of vendors are shortlisted by the Government Department
and the farmer is free to approach any of the enlisted ven-
dors. The vendor of materials would provide a quotation in
the name of the concerned farmer and here also the applicant
has nothing to do with the Department.
(iii) The farmer then submits the quotation issued by the vendor
to the Department and there are three options available for
the farmer to be exercised :
(1) Option 1 : The farmer can use his own financial re-
sources and gets the work executed. The farmer pur-
chases the materials from the vendors and makes
payment for the supplies received and submits the
details of claim to the department. The department
then sanctions the amount of financial assistance
which goes to the farmer’s account directly. There is
no contract or contact between the department and
the applicant vendor and the contract is only be-
tween the vendor applicant and the farmer and is
clearly of supply to the farmer for the invoiced
amount. There is no mention of the subsidy amount
and irrespective of the fact whether the farmer re-
GST LAW TIMES  21st May 2020  207