TMI Blog2022 (4) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... vance ruling. The determination of place of supply is not covered under any of the clauses (a) to (g) of Section 97(2) of the CGST Act 2017. Further, the use of term 'shall', is an imperative command restricting the scope of advance ruling only to the questions enumerated in the said sub-section. Thus, to answer the question relating to determination of place of supply, is beyond the scope of advance ruling. This authority, therefore, cannot answer the first question in the application. The second question regarding eligibility of refund or exemption is a conditional one and comes into existence only if the impugned services of the applicant do not qualify as export of services . The question regarding export of services becomes redundant as the question cannot be answered by this authority. Therefore the instant application is liable for rejection. The application filed by the applicant for advance ruling is hereby rejected. - KAR ADRG 12/2022 - - - Dated:- 21-4-2022 - DR. M.P. RAVI PRASAD AND SRI. T. KIRAN REDDY, MEMBER Represented by : Sri. Abhishek Mishra, CA Authorised Representative ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the city core, and enhance competitiveness, sustainability and inclusiveness of the city. (ii) Creation of a ridership base that improves the economic and financial viability of mass transit investment. (iii) Accessibility benefits of a comprehensive public transport system for all city residents. (iv) Using land as a revenue Source to finance long term investment needs of the city. (v) Addressing complex and intertwined economic and technological needs. 5. Applicant's Interpretation of Law: 5.1 Export of Services 5.1.1 As per Section 16 (1) of the Integrated Goods and Services Tax Act, 2017 ( IGST Act ), export of services qualifies to be zero rated supply , which means that there would be no levy of GST on services qualifying as export of services . 5.1.2 For qualifying as export of services , specific conditions, as provided under Section 2 (6) of the IGST Act, should stand fulfilled. The said conditions and whether such conditions are fulfilled vis-a-vis the present facts is discussed in the table below: Sl.No. Conditions for qualifying as export of services Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to immovable property , it may be contended that the place of supply of services rendered by JV India would be Bengaluru i.e. within India. Accordingly, such services would not qualify as export of services and hence taxable @ 18%. However, Section 13(4) of the IGST Act provides that the services should be directly in relation to an immovable property , whereas in the present case the technical assistance support services proposed to be rendered by JB India is a feasibility study and holistic planning of the public mass transit system involving new metro rail lines. The term directly in relation to immovable property means that the nexus between the proposed services and the immovable property is distinct and clear. If the service in question are remotely related to or are indirectly related to the immovable property, it may not be legally plausible to construe place of supply of such service to be the location of immovable property in terms of Section 13(4) of the IGST Act. 5.1.5 In the instant Case, the scope of work of the technical assistance support, is largely related to planning transit-oriented development along mass transit corridors, strategic urban renewal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation and from all customs duties. The Bank shall also be exempt from any obligation for payment, withholding or collection of any tax or duty [Section 5 (1) of the ADB Act, 1966 read with Article 56 (1) of the schedule thereto refers]... 3. CESTAT Mumbai vide final order dated 17-10-2016 in the case of M/ s Coastal Gujarat Power Ltd. Has held that when the enactments that honour international agreements specifically immunize the operations of the service provider from taxability, a law coutrary to that in the form of Section 66A of Finance Act, 1994 will not prevail. With the provider being not only immune from taxation but also absolved of any obligation to collect and deposit any tax, there is no scope for subjecting the recipient to tax. There is no need for a separate exemption and existing laws enacted by the sovereign legislature of the Union suffice for the purpose of giving effect to Agreements. 4. Accordingly, it is clarified that the services provided by ... ADB are exempt from GST in terms of provisions of ...ADB Act. The exemption will be available only to the services provided by ADB... and not to any entity appointed by or working on behalf of ADB... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify on the aforesaid aspect basis which IBI would decide whether it is required to charge GST on its invoice issued to ADB. 6. The Joint Commissioner of Central Tax, Bengaluru East Commissionerate, Bengaluru vide their letter dated 30.12.2021, furnished their comments on the question raised by the applicant in the instant application, inter alia stating that as per Section 2 (6) of the IGST Act 2017, place of supply of service has to be determined for qualification of any service to be an export of service and determination of place of supply of service is not within the scope of Advance Ruling Authority, in terms of Section 97 (2) of the CGST Act 2017. Further the Joint Commissioner also quoted the following rulings in support of their views. a) M/s Workplace Options India Pvt. Ltd., - Advance Ruling No. KAR ADRG 52/2021 dated 29.10.2021 b) M/s Sabre Travel Network India Pvt. Ltd.,-2019 (27) G.S.T.L. 754 (AAAR-GST) c) M/s Asahi Kasei India Pvt. Ltd.,-2019 (28) G.S.T.L. 172 (AAAR-GST) PERSONAL HEARING PROCEEDINGS 7. Sri Abhishek Mishra, Chartered Accountant Authorised Representative of the applicant appeared for personal hearing proceedings, held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determination of place of supply 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 can't be any two arguments that the said issue relating to the determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfills the definition of place of service, would also come within the ambit of the larger 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 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). The applicant brought out the observations of the Hon'ble High Court of Kerala, in para 21 of the said judgement. 8.7 The Advance Ruling Authorities of various states have adjudged and clarified on the similar matter in several instances, notable few of which are enumerated as under: 1. AAR, Maharashtra's ruling GST-ARA-20/2019-20/B-59 dated 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided. Thus, there needs to be a very close link or association between the service and the immovable property. Needless to say, this rule does not apply if a provision of service has only an indirect connection with the immovable property, or if the service is only an incidental component of a more comprehensive supply of services. 8.9 It is submitted that the services of IBI can only be construed to be remotely related to an immovable property which is not identifiable at present, and it is not related directly to specific sites of land or property but to Bengaluru city per se. At this juncture, it is also worthwhile to refer to Section 13 (4) of the IGST Act. The relevant part of the said section is The place of supply of services supplied directly in relation to services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located , from which it would emerge that services of IBI are not directly related to any specific immovable property, whether present or upcoming. Further, the services of 1BI are not purported to be in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange for in Indian rupees wherever permitted by the Reserve Bank of India] 2 ; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 13. It could be seen that for a service to qualify as export of service it has to satisfy the conditions enumerated under Section 2(6) of the IGST Act, 2017, one amongst them is place of supply of service which has to be outside India. 13.1 The issue before the authority now is to decide whether the Authority of advance ruling can determine the place of supply. In this regard, the applicant has claimed that the determination of place of supply would in effect decide whether a service qualifies as export of service or not. This would in turn determine the liability of the applicant to pay the tax on services, which is squarely within the power of determination of the liability t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. This would mean that the ruling given by the said Authority will be applicable only within the jurisdiction of the concerned state. It is for this reason that questions on determination of place of supply cannot be raised with the Authority of advance ruling. 13.3 We also invite reference to the definition of 'advance ruling' in Section 95(a) of the CGST Act, 2017 as under- (a) 'advance ruling' means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; From the above, it is seen that advance ruling means a decision of the Authority on the matters or on questions specified in sub-section (2) of Section 97. The said sub-section stipulates the questions on which advance ruling can be sought as under- (2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company agreement entered into by the said branch with the principal company incorporated in USA? It could be seen from above that the question is directly linked to the GST liability, whereas in the instant case the question is Whether consultancy services rendered to ADB, Manilla would qualify as export of services in terms of Section 2(6) of the IGST Act 2017 ? . Thus the issue in the instant case is different to that of the question in the case of Sutherland Mortgage Services Inc. and hence the judgment supra is not applicable to the instant case. 13.5 The Hon'ble Appellate Authority for Advance Ruling, Karnataka have held, as under, in the case of M/s Eicher-Volvo Commercial Vehicles Ltd., Bengaluru. 23. The Authority for Advance Ruling and the Appellate Authority for Advance Ruling have both been constituted in exercise of the powers conferred under Section 96 and 100 of the Karnataka Goods Services Act 2017, which Act extends to the whole of the state of Karnataka. The AAR and the AAAR are the creatures of the statute and have to function within the legal boundary mandated by the Act. As the 'place of supply' is not covered by Section 97( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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