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June 9, 2022

Diesel is exempt from the GST charge, it is outside the scope of the Advance Ruling: AAR

by CA Shivam Jaiswal in GST

Diesel is exempt from the GST charge, it is outside the scope of the Advance Ruling: AAR

Facts and Issue of the case

M/s. The Singareni Collieries Company Limited, Head Office, Kothagudem Collieries, Kothagudem, Badradri, Telangana, 5071014 (36AAACT8873F1Z1) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules. At. the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.

It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted

M/s. Singareni Collieries Company Limited is entering into contracts with a host of vendors/suppliers for extraction of coal. In the process, they are procuring diesel and supplying the same to their contractors free of cost. They are desirous of ascertaining their liability under GST when such diesel is supplied free of cost. Hence this application.

Questions raised: Clarification on determination of transaction value in case of supplies made free of cost by recipient by suppliers as per terms of contract.

Observation and Conclusion of the Court

The commodity ‘Diesel’ is covered under Entry 54 to the List II of the Schedule VII to the Constitution of India and therefore it is excluded from levy of GST and hence beyond the scope of Chapter XVII of the CGST Act, 2017.
Hence the application was rejected by the court


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