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18% GST on Coal Handling and Distributor Charges whenever Supply is made to Consumers

  • | Divita S Gupta

18% GST on Coal Handling and Distributor Charges whenever Supply is made to Consumers

The Madhya Pradesh bench of the Authority of Advance Ruling has held that a GST of 18% is applicable on coal handling and distributor charges whenever the supply of such a service is intended to be made expressly to consumers. The applicant, a business engaged in the trading of coal in India and purchase of coal from domestic markets as well as imports from overseas approached the AAR seeking an advance ruling. The submission by the applicant was to clarify if they are liable to discharge tax liability at the rate of 18% on coal handling and distribution charges wherever the supply of such services is intended to be made expressly to a customer or will they be entitled to charge GST at the rate of 5% as applicable on supply of coal. Also, will the applicant be entitled to utilise the input tax credit availed for discharging liability towards the supply of coal and supply of coal handling and distribution charges. The MP AAR held that coal handling and distribution charges will be taxed at the rate of 18% and not 5% wherever the supply of such services only is intended to be expressly made to a customer. The bench quoted, "In light of the referred provisions we are of the opinion that input credit availed as per the conditions specified in section 16 shall be allowed for discharging the liability towards the supply of coal and supply of coal handling and distribution charges respectively."


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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