Order Date – 09 February 2023

Facts – 

• The applicant, JAI LOKENATH FLOUR MILLS PRIVATE LIMITED has entered into a contract with the Governor of the State of West Bengal for the conversion of wheat into atta/ fortified atta. He charges crushing charges from the State Government valued at Rs 136.48 per quintal and further retains 2 gunny bags in which 100 kgs of wheat is supplied to him further retain 2 gunny bags in which 100 kgs of wheat is supplied to him as non-monetary consideration.
• As per Notification No. 12/2017, if the result of the exemption ratio calculation is less than 25%, the exemption will be available. In the present case, the ratio comes to 23.03% which does not exceed 25% of the value of supply.
• Hence, the applicant has filed an advance ruling and is of the view that the services provided by him to the State Government shall be liable for an exemption from GST.

Issue – 

• Whether the services provided by the applicant is taxable?

Orders – 

• The authorities finds that the services provided by the applicant fall under the composite supply of services.  The value of supply shall be the consideration in money and shall also include all the components towards non-cash consideration. The value of non-monetary considerations is known at the time of supply as the net realizable value is ascertainable.
• The Court relied on the order in the case of M/s Shiv Flour Mill and stated that this composite supply of services by way of milling of wheat into flour (atta) is eligible for exemption under serial no. 3A of Notification No. 12/2017 since the value of goods involved in such composite supply does not exceed 25% of the value of supply.