2024 (5) TMI 1209 - AAAR - GST

Non-Payment of Required Fee for Filing an Appeal - Appeal against the order of AAR - Classification of services - licensing services received by the applicant from SIBV under the MLA and the TLA - Whether with effect from 1 October 2021 licensing services received by the Appellant from SIBV under the MLA and the TLA will be taxable at 18% under Entry 17 (ii) of the Service Rate Notification or continue to be taxable at 12% under Entry 17 (iii) of the Service Rate Notification? - HELD THAT - The Appellant was mandated to deposit a total of 20, 000/- as fee under IGST Act as a mandatory statutory precondition for filing appeal against the order of the Authority for Advance Ruling Haryana. However it is found that vide challan No. 22020600173423 dated 23-02-2022 the Appellant has paid only 10, 000/- as Tax under IGST head and not the required fee. Since the application of the Appellant is incomplete for want of deposition of requisite fee (which is to be deposited in the manner specified in Section 20 of the IGST Act read with Section 49 of the CGST and HGST Act respectively) the appeal of the Appellant is not admitted. The appeal of the Appellant being incomplete for want of deposition of requisite fee as mandated under the GST law deserves to be rejected. Therefore the appeal filed by M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd., ) Gurugram-122002 Haryana is not admitted. Appeal disposed of.

Summary

Issues Involved:
1. Classification of licensing services and applicable GST rate.
2. Compliance with procedural requirements for filing an appeal.

Summary:

1. Classification of Licensing Services and Applicable GST Rate:

The Appellant, M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd.), appealed against the Advance Ruling No. HR/ARL/07/2021-22 dated 10.01.2022, seeking clarification on the GST rate applicable to licensing services received from SIBV under the Master License Agreement (MLA) and Trademark License Agreement (TLA). The Appellant argued that these services should be taxable at 12% under Entry 17 (iii) of the Service Rate Notification, which deals specifically with licensing of Intellectual Property (IP) rights in respect of goods other than Information Technology software. The Appellant contended that the services were previously taxed at 12% under Entry 17 (i) until 30.09.2021, and post-amendment, should continue to be taxed at 12% under Entry 17 (iii).

The Advance Ruling Authority ruled that licensing services received by the Appellant from SIBV under the MLA and TLA will be taxable at 18% under Entry 17 (ii) of the Service Rate Notification and not at 12% under Entry 17 (iii). The Appellant challenged this ruling, arguing that the Authority failed to consider the specific nature of the services and the applicable legal provisions, rendering the order non-speaking and arbitrary.

2. Compliance with Procedural Requirements for Filing an Appeal:

The appeal was not admitted due to non-compliance with the procedural requirement of depositing the requisite fee. As per Section 100 (3) of the CGST Act, 2017, and Rule 106 (1), the Appellant was required to deposit a total fee of Rs. 20,000 for filing the appeal. However, the Appellant deposited only Rs. 10,000. Consequently, the appeal was considered incomplete and was rejected for non-compliance with the statutory precondition.

Order:

The appeal filed by M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd.) was not admitted and was disposed of on the grounds of non-compliance with the mandatory fee deposition requirement under the GST law.