Breif Issue :

Fact & Issue of the case:

Whether the legally prescribed activity of depositing the timber/wood with the Government Timber Depot for disposal as per provision of Section 104 of the Karnataka Forest act will constitute a supply and therefore subject to the payment of GST for keeping the goods at the custody of the auctioneer i.e, Government Timber Depot?

On what value GST is chargeable in the invoice, if applicable?

What Is the time of supply of timber ,if the transaction is supply in the hands of applicant?

Should GST paid by the applicant on supervision charges collected by the Government Timber Depot under Reverse Charge as per sl.no 5 of Notification 13/2017 ?

The applicant is engaged in the business of Tea/Coffee/Pepper Plantation as a part of Tata Group of Companies. The entity to which the applicant tends to deposit the timbers (Government Timber Depot) is a Registered entity under GST Act. There are two types of Transactions like- sale of timber by Karnataka Timber depot On the Behalf of applicant and provision of service of the supervision of timber till the time of sale. As per clause (5) of section 2 of CGST Act ,2017 the depot is considered as an agent.

The value of supply of goods between the principal and his agent shall be the open market value of the goods being supplied as determined under rule 30 and 31 in that order. The time of supply of the goods shall be the earlier of the date of issue of invoice by the supplier to the last date o which he is required to issue the invoice under section 31 and the date on which supplier receives the payment. This supply of services of supervision is a supply between two principals and GST needs to be paid on the transaction.

Notification No.13/2017-CT(rate) ,shifts the liability to pay tax on the recipient of the service instead of the supplier by a reverse charge mechanism. According to entry 5 of the notification the applicant is liable to pay tax on the receipt of supervision services.