Facts: M/s Indian Oil Corporation Ltd. (“the Applicant”) ferries goods arriving at Haldia port of the Appellant to the export warehouse. It sought advance ruling on whether or not GST paid on the railway freight for transportation of goods from Applicant’s refinery at Haldia port to its export warehouse at Raxaul could be availed as Input Tax Credit. West Bengal Authority for Advance Ruling (WBAAR) ruled that ATF and other non-taxable supplies from the Applicant’s Haldia Refinery to the export warehouse of the Applicant were not zero-rated supplies. They were non-taxable supplies from the Applicant to the Bihar Unit of the Applicant who were distinct persons in terms of Section 25 (4) of the GST Act. Therefore, the Applicant could not claim credit of the GST paid on the railway freight for transportation of ATC and other non-taxable supplies from West Bengal to Bihar Unit. Present application was filed by the Appellant to the Appellate Authority for setting aside of the order of WBAAR.
Issues Involved: Whether the West Bengal Authority for Advance Ruling was correct in holding that ITC paid on transportation cost on goods transported from refinery of the Appellant to its warehouse will not be available to the Appellant?
Held: The Hon’ble AAAR, West Bengal vide its Case No.10/WBAAAR/APPEAL/2018-19 dated March 8, 2019 observed that the Appellant stock transfers to its distinct entity i.e. the Appellant’s, Raxaul Depot. It was concluded that removal of goods without paying duty (under Bond) from Haldia Refinery to the export warehouse of the Appellant cannot be termed as ‘export of goods’ within the meaning of Section 2 (5) of the IGST Act and cannot be termed as zero rated supply under Section 16 (1) (a) of the IGST Act. Movement of goods from the Applicant’s factory at Haldia to the export warehouse is therefore not inextricably linked to ultimate export to Nepal.
The Applicant relied on ARE-3 issued by the export warehouse as final proof of export. As final clearance took place from the export warehouse of the Applicant and not from Applicant’s Haldia unit, endorsement copies of ARE-3 cannot be treated as final proof of export. In view of the above, the ruling of West Bengal Authority for Advance Ruling was upheld.
Citation: [2019] 103 taxmann.com 391 (AAAR-WEST BENGAL)