Order date – 27 October 2022

Key Pointers –

• The Applicant, M/s. Innovative Nutrichem Pvt. Ltd, are manufacturer and supplier of animal feeds classifiable under HSN 23099020, which are exempt from GST vide entry no.102 of the Notification No.02/2017 Central Tax (Rate) dated  28th June 2017.
• They use the service of Goods Transport Agencies (GTA) to transport their products/goods and pay freight/transportation charges under Reverse Charge Mechanism (RCM). They also use security services which also fall under RCM.
• The issue involved here is whether the applicant is liable to pay GST under RCM for services procured from the respective service providers being the manufacturer and supplier of animal feeds classifiable under HSN 23099020?
• The AAR state that as per Section 9(1) ibid is the charging section and Section 9(3) ibid is the relevant section for payment of GST under reverse charge mechanism. Further Notification No.13/2017 Central Tax (Rate) dated 28th June 2017, issued under Section 9(3) of the CGST Act 2017, notifies that on categories of supply of services mentioned in the notification, the whole of central tax leviable under Section 9 of the CGST Act shall be paid on reverse charge basis by the recipient of such services.
• It is admitted that the applicant is registered person under GST and located in taxable territory. It is apparent from the Notification that being the recipient of the services of Goods Transport Agencies (GTA) and security services which are squarely covered under the category of supplies attracting GST liabilities on reverse charge mechanism. 
• Thus the applicant is liable to pay GST under RCM for the services notified and covered under RCM, received from the service providers, in spite of being a manufacturer and supplier of exempt goods falling under HSN 23099020.