ADVANCE RULINGS FOR REGISTRATION UNDER ‘CGST’

[Mr. M. GOVINDARAJAN]

Advance Ruling

Section 97(1) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that an applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.

Section 97(2) 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 the 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 in a supply of goods or services or both, within the meaning of that term.

In this article some of the rulings given by Authority for Advance Ruling of various States are discussed on the matter of registration.

Reverse charge

 In re ‘Rajiv Gandhi Centre for Aquaculture’ – 2019 (3) TMI 1074 - AUTHORITY FOR ADVANCE RULING, TAMILNADU Rajiv Gandhi Centre for Aquaculture, registered under Tamil Nadu Societies Registration Act, 1975, makes various taxable as well as exempt supplies.  The applicant also receives consultancy services from abroad as well as legal services liable to tax under reverse charge mechanism.  The applicant has aggregate turnover above ₹ 20 lakhs and therefore the applicant is liable for taking registration under CGST Act.  Further the applicant is having offices making supplies from different States liable to take registration in every State or Union territory.

In re ‘Jalaram Feeds’ – 2019 (6) TMI 1063 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the Authority for Advance Ruling held that the scheme GST being a tax on the event of ‘supply’ every supplier needs to get registered. However, as per the scheme of the Act, not every supplier is required to get registered. Only those suppliers, whose aggregate turnover of all supplies exceeds the threshold limit as prescribed under Section 22 (including exempted and taxable supplies). Thus to be registered a person satisfies two conditions namely, supply of taxable goods or services or both and aggregate turnover in a financial year exceeds threshold limit.  Section 23, provide exemption to certain category/ class of person from obtaining registration under the Act. Such category consist of persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land. Thus section 23 is not contrary to section 22 but is clear expression of the intent of Section 23.  From conjoint reading of Section 9 and section 24 of the Act, since the applicant is required to pay tax under reverse charge, they have to compulsorily register under GST and the requirements of Section 22(1) pertaining to taxable supply and the threshold limit are not applicable to them.  The principles of jurisprudence namely the rule of harmonious construction and the rule against redundancy, the applicant would go out of the scope of Section 23 of the GST Act because he is making certain quantity of taxable supply of goods transport service by way of reverse charge mechanism and would fall within the scope of section 24 of the GST Act for the purpose of registration and hence he would be required to obtain registration under the Act in order to discharge his duty liability under reverse charge, notwithstanding the turnover limits specified in sub-section (1) of Section 22 of the GST Act.  The Authority ruled that the applicant is liable to get registration in view of section 24 of the Act.

Exporting goods to FTWZ unit

In re ‘Sadesa Commercial Offshore De Macau Limited’ – 2019 (2) TMI 194 - AUTHORITY FOR ADVANCE RULING, TAMILNADU, the Authority for Advance Ruling held that the foreign based entity exclusively engaged in exporting goods to Free Trade Warehousing Zone unit for subsequently selling it to DTA customers in India who clears the same from such FTWZ on payment of appropriate BCD and IGST, is not required to take registration with effect from 01.04.2018.

Developmental rights

In re ‘Patrick Bernardinz D’sa’ – 2018 (12) TMI 535 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA the applicant entered into an agreement with Nforce Infrastructure India Private Limited, Mangalore to develop his land out of which for his contribution of land, he gets a share of 50% of the total 12 flats constructed and also 50% share out of 4000 sq. ft of commercial construction.  The Authority held that the land owner is the supplier of developmental rights and liable for registration.  The land owner is also liable to pay GST on premises allotted to him, which he intended to distribute among his family members.

Separate registration

In re ‘Sonkamal Enterprises Private Limited’ – 2018 (12) TMI 532 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the invoices are issued from Mumbai Head Office for imports received at Haldia Port, West Bengal.  The supply of goods imported into India shall be treated as supply of goods in course of inter-State trade or commerce.  The place of supply is the location of importer and since importer got registration in Mumbai, the place of supply is Mumbai.    The assessee clears goods by paying IGST from GSTIN issued in Mumbai as it had no establishment or place of operation or any godown or GSTIN in West Bengal.  The place from where assessee makes a taxable supply of goods shall be his location being Mumbai, he can clear goods on basis of invoices issued by Mumbai office and therefore need not take separate registration in West Bengal.

In re ‘K.M. Trans Logistics Private Limited’ – 2019 (2) TMI 919 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN the applicant is the service provider, having the registered office at Jaipur, Rajasthan.  The applicant provides transport services to various manufacturers of motor vehicles for carrying their vehicles from the factory to the various cities in India where the authorized dealers are located.  The applicant sought for an advance ruling as to whether separate registration is required in another State where a vacant plot has been leased for temporary parking of trucks.  The Authority held that all operational control relating to transport is done from registered office in Jaipur where all accounts are also maintained, thus making it ‘place of business’ for him from where he is making supply outside State.  The applicant has rightly taken the registration in Rajasthan as location of supplier as well as place of supply is in Jaipur only.  As regard ruling on registration for having leased vacant plot in another State, the said issue is outside the purview of Authority for Advance Ruling, Rajasthan as it is having jurisdiction only in Rajasthan.

In re ‘Aarel Import Export Private Limited’ – 2019 (6) TMI 1011 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the Authority for Advance Rulings observed that   as per the provisions of Section 7(2) of the IGST Act, 2017, supply of goods imported into India shall be treated as supply of goods in the course of inter - state trade or commerce and as per Section 5(1) of the Act, liable to IGST at the point when duties of Customs are levied on the said goods under Section 12 of the Customs Act, 1962. In respect of goods imported into India, as per provisions of Section 11(a) of the IGST Act, 2017, the place of supply shall be the location of the importer.  In the present case since the Importer registered in Mumbai, the place of supply will be Mumbai, Maharashtra.  Hence the applicant will be clearing the goods by paying IGST using GSTIN issued to them in Mumbai, Maharashtra. Since the applicant has no establishment or place of operation or any godown or GSTIN in the State of Odisha, Paradip Port i.e. at the port of import, the place Of supply shall be the place from where the applicant makes a taxable supply of goods which, in this case is the Mumbai Head Office, the applicant can clear the goods on the basis of invoices issued by the Mumbai Head Office and therefore they need not take separate registration in the State of Odisha.

In re ‘Spacelance office solutions Private Limited’ – 2019 (8) TMI 817 - AUTHORITY FOR ADVANCE RULING - KERALA the Authority held that there is no prohibition under GST law for obtaining GST registration to a shared office space or virtual office, if the land lord permits such sub leasing as per the agreement. Each ‘co-working space’ is demarcated with different suit number or desk number. As the GST registration is based on PAN, identification of tax payer is not a difficult thing. While applying for GST registration for the co-working space, the rental agreement with the land lord and lessee along with the agreement between lessee and sub lessee must be uploaded as proof of address of principal place of business of respective suit or desk number. The GST number assigned to each co-working space must be displayed at a prominent location and books of accounts relating to the activities or business are to be kept in the principal place of business.  Thus, separate registration can be allowed to multiple companies functioning in a ‘co-working space’and which provide services alone. Such companies shall upload the rental agreement with the land lord and lessee. If there is any sub-lease, then rental agreement between lessee and sub lessee should also be uploaded as proof of address of principal place of business of respective suit or desk number assigned to them. In addition to this, the applicants can upload a copy of "monthly utility bill" in connection with payment towards electricity charges, water charges or other common services availed by the respective suit or desk number.

Exempted services

In re ‘Time Tech Waste Solutions Private Limited’ – 2019 (6) TMI 1339 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL the applicant is rendering conservancy/solid waste management service to Municipal Corporation, a local authority under section 2(69) of the Code.  The said services are exempt from payment of GST under Sl. No.3 of Notification No. 12/2017-Central Tax (Rate).  Since the applicant is rendering exempt services the provisions of section 51 to the extent they mandate and deal with the mechanism of TDS, do not apply to such cases.  The Authority held that the applicant’s turnover consists of entirely of exempt supplies it is not liable to registration under section 23(1)(a) of the Act.