TMI Blog2022 (4) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... ion but is the recipient of the supply of service. The Appellant has sought for a ruling as a recipient of service. The advance ruling mechanism under GST does not envisage giving a ruling to a recipient of supply of goods or services or both for the simple reason that any ruling passed by the Authority is applicable only to the supplier of the transaction and to the jurisdictional officer. In terms of Section 103 of the CGST Act, the advance ruling pronounced by the Authority is binding only on the applicant who has sought for the ruling on any matter referred to in Section 97(2) as well as on the concerned officer or jurisdictional officer of the applicant. The Appellant in the capacity of recipient of service is not eligible under law to seek a ruling on the taxability of a transaction which is received by him. The lower Authority does not have the authority to determine the classification or nature of service supplied by Beacon, US based on an application made by the recipient of service. If the classification or nature of the service supplied by Beacon, US cannot be determined for lack of jurisdiction, it automatically flows that determination of place of supply also cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant is engaged in providing human resource consulting services, employee assistance services to its corporate customers across India or outside India. The Appellant is a part of a multi-national group and is a subsidiary of Workplace Options LLC. Workplace Options LLC entered into a global arrangement with Beacon Health Options Inc.-US (previously known as Value Options Inc. - US), which is a company established in USA and does not have any office or fixed establishment in India, in November 2009 for the purpose of mutual referral of clients and work agreements to Workplace Option group companies across the globe. Beacon US, as part of the global arrangement, has entered into arrangement, for the Indian market involving Workplace Option India Pvt. Ltd. (the Appellant) and referred a customer M/s FIS Global Solutions India Pvt. Ltd., ('FIS India') to the Appellant for performing employee assistant services. For referring clients to the Appellant, Beacon US charges referral fee to the Appellant, by raising an invoice directly to the Appellant, equal to certain percentage of the price charged by the Appellant to FIS India, as agreed by both the Appellant and Beacon US. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w:- 23. In the instant case, it is true that the issue relating to determination of place of supply as aforestated is not expressly enumerated in any of the clauses as per clauses (a) to (g) of Section 97(2) of the CGST Act, but there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfils the definition of place of service, would also come within the ambit of the larger of issue of determination of liability to pay tax on any goods or services or both as envisaged in clause (e) of Section 97(2) of the CGST Act. The Advance Ruling Authority has proceeded on a tangent and has missed the said crucial aspect of the matter and has taken a very hyper technical view that it does not have jurisdiction for the simple reason that the said issue is not expressly enumerated in Section 97(2) of the Act. This Court has no hesitation to hold that the said view taken by the Advance Ruling Authority is legally wrong and faulty and therefore the matter requires interdiction in judicial review in the instant writ proceedings. 6.3. The Appellant submitted that GST being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to law and binding judicial precedents and pass necessary /consequential directions as deemed fit in the interest of equity and justice. PERSONAL HEARING 7. The appellant was granted a virtual hearing on 27th January 2022. The hearing was conducted on the Webex platform following the guidelines issued by the CBIC vide Instruction F.No 390/Misc/3/2019-JC dated 21st August 2020. The Appellant was represented by Shri. Harish Bindhumadhavan and Shri. Rishabh Singhvi, Advocates and authorised representatives. 7.1. The Advocate Shri. Harish Bindhumadhavan explained the facts of the case and the circumstances leading to the present appeal. He submitted that the Appellant is an entity which is a subsidiary of an overseas Company - Workplace Options LLC. The latter has entered into an agreement with M/s Beacon Health Options Inc - US for the purpose of referring clients to Workplace Options companies worldwide, which includes the Appellant. As part of the agreement, M/s Beacon Health Options US has referred clients to the Appellant. The Appellant renders service to the referred clients and they pay GST on the services so supplied. The Appellant also pays a commission/fee to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Kerala High Court has been accepted by the Department, Shri. Rishabh Singhvi, Advocate replied that it is not known whether the Department has accepted the said order. However, the said decision of the Kerala High Court has since been taken cognizance of by other Advance Ruling authorities and Appellate Authority for Advance Ruling in other parts of the country and they have proceeded to examine issues relating to place of supply. He submitted a list of such rulings in the compilation, where the authorities have determined place of supply, based on the decision of the Kerala High Court. 7.5. In view of the above, the Advocates submitted that the ruling of non-maintainability given by the lower Authority is incorrect and deserves to be set aside. They submitted that they will not be arguing on merits since the lower authority has not examined and passed a ruling on merits of the case; that their only plea is that the application for advance ruling is maintainable and the question on which the ruling has been sought is well within the purview of Section 97(2) of the Act. 7.6. They agreed to submit a written summary of the submissions made today. They also stated that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of place of supply if such determination is linked with the liability to pay tax and in such cases the Authority has the jurisdiction to pass a ruling on the issue of place of supply. 10. Having thus said, we now examine whether the in the instant case the Authority was correct in not determining the place of supply. As already stated, in the instant case, the issue is whether the services procured by the applicant from Beacon, US qualifies to be an import of service. Import of service has been defined in Section 2 (11) of the IGST Act as a supply of service where:- - The supplier of service is located outside India - The recipient of service is located in India; and The place of supply of service is in India Thus, one of the important requirements for supply of any service to be treated as an import of service, is that the place of supply must be in India. The liability to pay tax in the case of an import of service is dependent on the place of supply. If the place of supply is outside India, then the supply of service will not be treated an import and the applicant who is the importer of the service will not be liable to pay tax on such import. Dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under GST may apply for an advance ruling and that the question on which an advance ruling is sought for may be with respect to any of the issues referred to in Section 97(2) which are in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In other words, it is a supplier of goods or services or both who can seek an advance ruling on any of the issues specified in clauses (a) to (g) of Section 97(2) above. In the case before us, we find that the Appellant who is the applicant of the advance ruling, although registered under GST, is not the supplier of the transaction in question but is the recipient of the supply of service. The Appellant has sought for a ruling as a recipient of service. The advance ruling mechanism under GST does not envisage giving a ruling to a recipient of supply of goods or services or both for the simple reason that any ruling passed by the Authority is applicable only to the supplier of the transaction and to the jurisdictional officer. In terms of Section 103 of the CGST Act, the advance ruling pronounced by the Authority is binding only on the applicant who has sought for the ruling on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principal company incorporated in USA ? It is in this background that the Hon'ble High Court has observed as follows:- A reading of clauses (a) to (g) of sub-section (2) of Section 97 of the CGST Act would make it clear that 7 items are enumerated as per clauses (a) to (g) of sub-section (2) of Section 97 and all those clauses other than clause (e) thereof are in specific terms. Whereas clause (e) of sub-section (2) of Section 97 of the CGST Act clearly mandates that the larger issue of determination of liability to pay tax on any goods or services or both would also come within the ambit of the questions to be raised and decided by the Advance Ruling Authority on which advance ruling could be sought and rendered under the said provisions. Whereas Clauses (a), (b), (c), (d), (f) (g), i.e. the clauses other than clause (e), are in specific pigeon holes and the provision as per clause (e) of sub-section (2) of Section 97 is in wide terms and the Parliament has clearly mandated that the latter issue of determination of liability to pay tax on any goods or services or both, should also be matters on which the applicant concerned could seek advance ruling from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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