TMI Blog2022 (5) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... ant ), No. 136, 6th Cross, 2nd Stage, Yeshwanthpur, Bengaluru-560022, having GSTIN 29AABCH1202M1ZR have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 201 Rule 104 of KGST Rules, 2017, in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the KGST Act. 2. The Appellant is a Private Limited Company registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST/SGST Act respectively). The Applicant is providing Covid- 19 Testing facility for all the passengers travelling by air, whether domestic or international. 3. The applicant has sought advance ruling in respect of the following question: i. Whether Goods and Service Tax ( GST ) will be levied on Revenue Sharing invoices raised by one party on to another party wherein the outward supply of services is exempt in nature. 4. Admissibility of the application: The question is about the determination of the liability to pay tax on any goods or services or both and hence is admissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity on 2nd September 2021. As per this particular agreement the BIAL will get certain percentage of revenue based upon the turnover of the applicant. The slabs for calculating the revenue share amount were agreed upon and mentioned in the said agreement. 5.6 The applicant has stated that apart from the rent charged from them, BIAL has also made a Revenue Sharing arrangement wherein the applicant will pay BIAL a share on the gross revenue earned during the month. 5.7 The applicant has stated that the revenue earned by them every month is variable in nature. Therefore, the applicant and BIAL have mutually decided the slabs / slab rates on which the revenue will be shared between both the parties, to avoid any future confusion and litigation. 5.8 The applicant states that BIAL will raise tax invoices for both rent and revenue sharing separately on them, as per the payment terms mutually decided by the parties. As per the mutually agreed payment terms between BIAL and the applicant, it can be construed that both rent and revenue sharing clauses are separate in nature. Hence separate tax invoices are generated. 5.9 The applicant states that BIAL has raised the tax invoices a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as an actionable claim and hence there will be no levy of GST on such transactions. The said claim will be covered under Schedule Ill of Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ) and will neither be considered as supply of goods nor supply of services. Hence, it is out of the ambit of GST and no GST will be levied on the said transactions. The relevant portion of the said ruling is extracted hereunder for ease of reference: 6.2.......... The applicant has a claim to the specified amounts in the event of occurrence of the specified strategic sale or IPO. His claim is contingent on such events occurring. The applicant has a beneficial interest in the profits arising out of such a strategic sale or IPO. It can be said that the Profit Sharing Agreement is an 'actionable claim'. 6.3. Section 2(1) of CGST Act states: 2. In this Act, unless the context otherwise requires,- (1) actionable claim shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882; Section 3 of Transfer of Property Act, 1882 state: actionable claim means a claim to any debt, other than a debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29th August, 2017 held that there is no dispute of the act that the appellant have been screening films in the multiplex on revenue sharing basis, which the undisputed findings recorded by Ld. Commissioner in the impugned order. Hence no service tax is liable to be paid by the applicant. 6.6 Considering the facts of the case and the above discussions, the applicant is of the view that no GST is to be charged on the Revenue Share Agreement. PERSONAL HEARING / PROCEEDINGS HELD ON 10-02-2022 7. Shri Sourav Arora, Director and Duly Authorised Representative appeared for personal hearing proceedings held on 10-02-2022 and reiterated the facts narrated in their application. FINDINGS DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein, specify the categories of services in respect of which- (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued] 13. Subsection 105 of section 2 of CGST Act 2017 defines 'supplier' as below: Supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied; The applicant states that BIAL raises tax invoices for revenue sharing on them. As per the definition of 'Supplier' as per section 2(105) mentioned supra and as per Section 31 which talks about tax invoice, BIAL becomes the supplier since, BIAL is issuing tax invoices to the applicant. 14. Now we proceed to examine the admissibility / maintainability of the instant application before going into the merits of the application. We invite reference to Section 95(a) of the CGST Act 2017, which defines advance ruling to mean a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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