Page 209 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : MEGHA AGROTECH PVT. LTD. 455
the farmer as in option 2 or from the Government Department as in
option 3 and the way the consideration is received has no bearing
on the price of the contract. Further he stated that Bank or the Gov-
ernment Department is only making the payment for the supply
made by him to the farmer on the account of farmer only and not
directly in their account with the vendor. He stated that there is no
privity of contract between the Banker and the applicant or between
the Government and the applicant and hence the financial assis-
tance cannot be treated as subsidy affecting the value of supply
within the meaning of Section 15(2) of the Act.
6. Discussion & Findings :
6.1 At the outset we would like to make it clear that the provisions of
CGST Act, 2017 and KGST Act, 2017 are in pari materia and have the same provi-
sions in like matter and differ from each other only on a few specific provisions.
Therefore, unless a mention is particularly made to such dissimilar provisions, a
reference to the CGST Act would also mean reference to the corresponding simi-
lar provisions in the KGST Act.
6.2 The application for advance ruling and the arguments made by the
applicant and also the submissions made by the Learned Representative during
the time of hearing were all considered and the issue that needs to be addressed
is related to whether the amount paid by the Government Department to the
farmer would constitute a part of the value of supply of not as per Section 15 of
the Act.
6.3 Section 15 of the CGST Act, 2017 reads as under :
“15. Value of taxable supply. -
(1) The value of a supply of goods or services or both shall be the transac-
tion value, which is the price actually paid or payable for the said supply of
goods or services or both where the supplier and the recipient of the supply
are not related and the price is the sole consideration for the supply.
(2) The value of supply shall include -
(a) ………
(b) ………
(c) ………
(d) ………
(e) subsidies directly linked to the price excluding subsidies pro-
vided by the Central Government and State Governments.
Explanation. - For the purposes of this sub-section, the amount of subsidy
shall be included in the value of supply of the supplier who receives the
subsidy.”
6.4 The nature of contract between the farmer and the applicant is veri-
fied and found that the applicant is entering into a contract with the farmer alone
for the supply of goods and/or services and there is no involvement of the third
party in the same. The consideration for the contract is the full value of the goods
and/or services and it is the recipient of the supply, i.e. farmer who has to pay
the entire consideration. The payment received by the applicant from the Bank in
case of option 2 supra or received by the applicant from the Government De-
partment in case of option 3 supra are received on account of the farmer only and
there is no privity of contract between the applicant and Bank or Government
GST LAW TIMES  21st May 2020  209