Home Case Index All Cases GST GST + AAR GST - 2021 (12) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (12) TMI 610 - AAR - GSTReverse Charge Mechanism - procurement of renting of immovable property services from Seepz Special Economic Zone Authority (Local Authority) - zero rated supply or not - Notification No. 13/2017 dated 28th June, 2017 read with Notification No. 03/2018 - Central Tax (Rate) dated 25th January 2018? - levy of IGST or CGST and SGST - HELD THAT:- In the instant case, as submitted by the applicant, they are receiving renting of immovable property services from a local authority i.e. SEEPZ SEZ and the applicant is registered under the CGST Act, 2017. Hence the applicant must discharge service tax liability under reverse charge mechanism as per the provisions of the amended Notification No. 10/2017- I.T. (Rate) dated 28.06.2017. The RCM provisions provide that all provisions of the IGST Act shall apply as if the recipient person is liable to pay tax. The subject case satisfies all the conditions of Notification No. 10/2017-I.T. (Rate) dated 28.06.2017 as amended, and therefore as per section 5(3) of IGST Act, 2017, we are of the opinion that, the applicant is liable to pay tax under Reverse Charge Mechanism. Applicant has cited Notification No. 18/2017- I.T.(Rate) to state that the renting of immovable property services are imported by them and are therefore exempted from IGST. Applicant has cited Section 2 (o) of SEZ Act 2005, which defines the term “Import” and have come to a conclusion that, receiving goods or services by a SEZ Unit from a SEZ Developer of same SEZ or different SEZ tantamounts to import of goods under the SEZ Act, 2005 and since, based on the Lohani Committee report, GST laws were aligned with the SEZ laws in 2018 the benefit of tax free procurement in terms of Notification No 18/ 2017- I.T. (Rate) dated 05.07.2017 is available to them. The applicant, a SEZ Unit, is situated in an Exclusive Economic Zone and as per the aforesaid definition mentioned above; the term ‘India’ includes an exclusive economic zone. Therefore in the subject case both, the recipient and supplier of services are situated in India. Hence, Notification No. 18/2017 is not applicable in this case. We agree with the submissions of the jurisdictional officer on this issue. Zero Rated supplies - HELD THAT:- The sub-section 16(2) of IGST Act, 2017 itself says that credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. Further sub-section 16 (3) is only applicable to “registered person making zero rated supply” i.e. suppliers of Zero Rated Supplies, but here, the applicant is recipient and thus it is not covered under section 16(3). Overall, a harmonious construction of section 5 (3) of IGST Act, 2017 read with relevant notifications and section 16 of IGST Act, 2017 clearly stipulates that applicant is liable to pay tax under Reverse Charge mechanism. Whether they are required to discharge liability under Reverse Charge Mechanism for procurement of other services? - HELD THAT:- Notification No. 10/2017-I.T. (Rate) dated 28.06.2017- amended by Notification No. 3/2018- IT. (Rate)-dated 25.01.2018, notifies only specific category of services on which tax is payable under reverse charge mechanism. Hence, applicability of the said notification cannot be decided in a general/blanket manner for other services mentioned by the applicant because the “other services” are not enumerated by the applicant - this issue cannot be answered in absence of proper information provided by the applicant. Under which head tax Applicant will be required to discharge tax, if any, under reverse charge mechanism? - HELD THAT:- The tax will have to be discharged under IGST.
|