BEYOND THE SCOPE OF ADVANCE RULING

[Mr. M. GOVINDARAJAN]

Questions on which advance ruling can be sought

Section 97(2) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that the question on which the advance ruling is sought under this Act, shall be in respect of-

• classification of any goods or services or both;
• applicability of a notification issued under the provisions of this Act;
• determination of time and value of supply of goods or services or both;
• admissibility of input tax credit of tax paid or deemed to have been paid;
• determination of liability to pay tax on any goods or services or both;
• whether applicant is required to be registered;
• whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results to any goods or services or both, within the meaning of that term.

Beyond the scope

Any question, other than the questions mentioned in section 97(2) of the Act, sought for Advance Ruling will be beyond the scope of advance ruling.  In this article some of decisions of the Authority for Advance Rulings holding that the question sought for advance ruling are beyond the scope of the advance ruling.   In such cases the application is rejected as the application is not maintainable.

Individual flat owner

In re ‘Kabra Galaxy Star 3 Co-op Housing Society’ – 2019 (7) TMI 1106 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant sought for advance ruling on the following question-

• Individuals who own flat(s) in a society but have opted not to become the member of the society, will be put at par with the other individual flat owner who have opted for the membership of the society, for GST exemption of ₹ 7500/- or will they be treated as outsider and shall be liable for GST without exemption of ₹ 7500/-

The Authority held that Section 97(2) which encompasses the questions, for the ruling by the Authority for Advance Ruling does not cover the question raised by the applicant.  The Authority felt that it does not have jurisdiction to pass any ruling on such matters/questions.  The Authority rejected the application as not maintainable.

Classification of inputs imported from out of India

In re ‘Raymond Fasteners India Private Limited’ – 2019 (6) TMI 1358 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant is involved in the developing and manufacturing of various types of fasteners and other accessories for a variety of industries.  To manufacture the products the applicant procures various inputs from outside India which are then used in the manufacture and subsequent sale of final products.  The applicant made the present application for the appropriate classification of the enumerated products imported by them.  The Authority analyzed the provisions of the Act. Section 5 of IGST Act provides for the levy of IGST on inter-State supply i.e., on imported goods from outside India.  IGST is levied on the basis of the scheme of HSN Code of that products prescribed in Customs Tariff Act, 1975.  The IGST and other customs duties are levied by the Customs Authorities, at the point of importation in India, whilst clearing the imported goods under appropriate HSN Code.   On goods imported into India, the Customs Authority is the first Authority to charge IGST and to classify the imported goods.  For queries with respect to classification of imported goods, there are separate regulations, viz., ‘Authority for Advance Ruling (Central Excise, Customs and Service Tax) Procedure Regulations, 2005 and as per the said regulations the said AAR is the appropriate authority to answer the questions related to classification of the imported goods.  Therefore the Authority rejected the application as not maintainable.

Admissibility of CENVAT credit in pre-GST regime

In re ‘Bauli India Bakes and Sweets Private Limited’ – 2019 (7) TMI 40 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant wanted advance ruling on the question whether the input tax credit availed by the applicant in respect of capital goods received prior to 01.07.2017 is admissible to the applicant.   The Authority held that the application is not in respect of input tax credit of tax paid or deemed to have been paid under the CGST Act, 2017.  The Authority is not having jurisdiction to decide on admissibility of CENVAT credit of duties paid under pre-GST regime on capital goods.  The Authority rejected the application being non maintainable.

Rulings on E-way Bill

In re ‘Tamil Nadu Edible Oils Private Limited’ – 2019 (8) TMI 28 - AUTHORITY FOR ADVANCE RULING - TAMIL NADU the applicant filed the present application seeking advance ruling on the question – whether e-way bill is required for consignments pertaining to multiple invoices to multiple customers moved in the same conveyance in which the value of each invoice is less than the limits for generation of e-way bill but in aggregate, the value of the multiple invoices exceeds the specified limit.  The issue or which Advance Ruling is sought depends on the provisions of e-way bill, which is not in the ambit of the Authority.  The application is therefore rejected without going into the merits of the case, on the issue of lack of jurisdiction.

In re ‘Rajendrababu Ambika’ – 2019 (7) TMI 809 - AUTHORITY FOR ADVANCE RULING, TAMILNADU one of the questions on which the applicant sought for advance ruling is for the clarification of the applicability of e-way bill procedures for their business activities which involves goods sent on delivery challan or erection purpose and bill made subsequently and for taking back the machinery to their place for maintenance and what are the transport documents to be used for the business activities.    The Authority rejected the application on the ground that the e-way bill procedure is not covered under the purview of the Advance Ruling.

Details to be filled in GSTR – 1

In re ‘Rajendrababu Ambika’ – 2019 (7) TMI 809 - AUTHORITY FOR ADVANCE RULING, TAMILNADU one of the questions on which the applicant sought for advance ruling is whether their nature of activities falls under works contract or not; if so what will be the rate of tax and it HSN Code and what are the details of entries to be made in monthly return GSTR – 1. The Authority held that the activity of the applicant are not works contract as defined under Section 2(119) of the Act but the details to be filled in GSTR – 1 are not answered as the same is not in purview of the Advance Ruling as per section 97(2) of the Act.

Construction of Breakwater wall at Jelly

In re ‘Konkan LNG Private Limited’- 2019 (7) TMI 617 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant’s query is whether the services of the works contract by the contractor is covered under item (vii) of Sl. No. 3 of the Table of notification No. 11/2017-Central Tax (Rate), dated 28.06.2017 as amended.  The Authority held that as per provision of section 95 of the Act, the authority can give a ruling to the applicant on matters or questions raised, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.  Since the breakwater is going to be constructed by a contractor the supply, if any, in such a case will be undertaken by the contractor and not the applicant.  Hence in view of the provisions of section 95 of the Act, the issue is not within the purview of the Authority and therefore the question is not answered.

Correction of past invoices

In re ‘Odyssey Tours and Travels Private Limited’ – 2019 (7) TMI 843 - AUTHORITY FOR ADVANCE RULING, GOA the applicant paid GST correctly but had not distributed the tax amounts correctly over the different States and Union territories for 13 months.  To rectify their mistakes, the applicants were advised to re-issue rectified invoices for the said period.  The applicant sought an advance ruling on the question whether the applicants may be allowed to start to correct their invoices for the said period.  The Authority was of the opinion that the questions raised by the applicant are in nature of seeking an advice on the procedures to be followed by the assessee and is not covered under section 97(2) of the Act which is of advisory in nature.  The Authority rejected the application holding that the application is not covered under the mandate of the Authority.

Export of goods

In re ‘Wilhelmsen Maritime Services Private Limited’ – 2019 (7) TMI 1280 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the Authority held that question as to whether supply of marine products to outbound ships would amount to export of goods or not, cannot be answered as aforesaid subject is out of jurisdiction of AAR .

Zero-rated supply

In re ‘Cummins Technologies India Private Limited’ – 2019 (7) TMI 1388 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant sought advance ruling on the question as to whether the liability to pay tax on the subject supplies can be assessed based on taxability as accorded to zero-rated supply.  The Authority held that the question does not fall within the purview of section 97(2) of the Act.

Calculation of refund

In re ‘Daewoo – TPLJV’ – 2019 (7) TMI 1229 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA the applicant sought advance rulings on the following questions-

1. The applicant though eligible to claim for refund of inverted duty structure under section 54(3) of the Act, wishes to understand in principle applicability of Notification Nos. and 26 inasmuch whether the same allow for refund of ITC availed on inputs services (and remaining unutilized) in whole or part thereof?
2. Where the answer to the above is negative, the applicant wishes to understand how does the Notification No. 21 and 26 apply in a scenario where factually following financials may exist-

1. Revenue streams

Works contract services liable to 12% GST = ₹ 1000

Output GST 12%     = ₹ 120

Total Revenues inch GST      = ₹ 1120

2. Input Tax Credit Data

Particulars Amount

ITC on inputs ₹ 65

ITC on input services        ₹ 90

Sub Total   ₹ 155

Less: Total tax on outward supplies         ₹ 120

Net balance remaining unutilized  ₹ 35

The Authority gave a ruling on the first question.  For the second question the Authority held that the question pertains to formulae for calculation of refund and hence does not fall within the purview of Section 97 of the Act and is therefore not answered. 

Determination of place of service

In re ‘Sabre Travel Network India Private Limited’ – 2019 (7) TMI 1475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA the Appellate Authority held that as per section 2(6) of the Integrated Goods and Services Tax Act,  2017 which prescribes conditions for qualification of any service to be an export of service, place of supply of service has to be determined.  Determination o place of service is not within the scope of the Advance Ruling.  The Authority for Advance Ruling had transcended its jurisdiction by commenting on place of supply of service.