TMI Blog2023 (1) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... legal force than that of a notification issued under same or any other provisions of the same Act. Hence the provisions laid down under section 16(1) of the IGST Act, 2017 will supersede over the notification issued under section 5(3) of the IGST Act, 2017, which enumerates the services which attract GST under reverse charge basis. It is also pertinent to mention here that the said provision of section 16(1) ibid, merely mentions about the supply of goods or services or both to the SEZ developer or SEZ unit. The said provision does not mention any thing about the type of the supplier. From the provisions of section 16 (1) and Section 5 (3) of IGST Act it is clear that the intention of the legislature is not to tax the supplies made to a unit in SEZ or a SEZ developer, which has been made zero rated under clause (b) of section 16 (1) of the IGST Act. 2017. By virtue of deeming provision under section 5 (3) of the IGST Act, 2017, the levy on procurement of services specified in Notification 13/2017 CT (Rate) falls upon the unit in SEZ or SEZ developer - The appellant will not be required to pay any GST under RCM on the impugned supply of renting of immovable property services rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 400096, which is a Local authority having GSTIN 27AAALS4995G1ZH. Additionally, other services like Advocate Services and Gate Pass Services from SEEPZ are being procured wherein GST is presently being discharged by the Appellant under the Reverse Charge Mechanism. 3.4 As per the Notification No. 18/2017 - Integrated Tax (Rate) dated 05.07.2017, the Central Government exempts services imported by a unit or a developer in the Special Economic Zone for authorized operations, from the whole of the integrated tax leviable thereon under section 5 of the Integrated Goods and Service Tax Act, 2017. 3.5 The Appellant further submits that the objective of government, according a special status to SEZs include, inter-alia, allowing tax free procurement of goods and services with support in basic essential infrastructure facility for production of goods or services. To further add, Section 7 of SEZ Act 2005 provides for exemption to all goods or services procured from a DTA (Domestic Tariff Area) or foreign suppliers specified in first schedule. According to Section 51 of the SEZ Act 2005, the provisions of SEZ Act would have overriding effect on provisions of any other act including tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as long as the services are used for authorized operations of the SEZ unit, the same should be exempted from the levy of tax. (c) The SEZ Act has an overriding effect and will prevail over any other provisions which may be inconsistent with the provisions of the SEZ Act. 5. In light of the above submissions, the MAAR, vide its order No. GST-ARA-93/2019-20/B-31 dated 12.03.2020, had rejected the Application as being non- maintainable by citing the provision of section 95 (a) of the CGST Act, 2017, which provides for the meaning of Advance Ruling. The MAAR in the aforesaid order dated 12.03.2020 had opined that since the Appellant are the recipient of services under consideration, and not the supplier thereof, hence they are not eligible to seek advance ruling in terms of the provision of section 95(a) of the CGST Act, 2017, which envisages that only the suppliers of the goods or services or both are entitled to seek advance ruling on matter or questions specified under section 97(2) of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by them. Appeal before the MAAAR 6. Pursuant to the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover CGST/IGST/SGST, therefore the same cannot be applied. The case laws relied upon are not applicable as the same pertain to service tax matters. 6.9-6.12 4. The question w.r.t liability in respect of other services, the question is general and cannot be answered in absence of any information. The communication issued by Ministry of Finance vide letter dated 18.12.2017 relied upon by the Appellant is not a circular per se. and as such, not binding. 6.16-6.21 8. Being aggrieved by the impugned order, the Appellant has filed the present appeal. GROUNDS OF APPEAL Reverse charge not applicable in case of SEZ 9. Reverse charge in terms of Notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017 read with Notification No. 03/2018 - Central Tax (Rate) dated 25.01.2018 and Notification No 10/2017 - Integrated Tax (Rate) dated 28.06.2017 (hereinafter referred to as reverse charge notification ) are not applicable in the case of a SEZ Unit and there ought to be a harmonized reading of the aforesaid reverse charge notifications issued under Section 9(3) of the CGST Act 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Economic Zone: 14. The impugned order has referred the Appellant as an Exclusive Economic Zone unit covered under the term India as defined under Section 2(56) of CGST Act and concluded that since both the supplier and the recipient of service are located in India, therefore, Notification 18/2017 - Integrated Tax (Rate) dated 05.07.2017 is not applicable. In this regards, the Appellant is an SEZ and not an EEZ. As according to UN Convention 1982, an EEZ is an area of the sea in which a sovereign state has special rights regarding the exploration and use of marine resources. However, an SEZ is a specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. 15. So, receiving goods or services by a SEZ Unit from a SEZ Developer of same SEZ or different SEZ tantamount to import of goods or services under the SEZ Act. 2005. In the instant case the SEEPZ SEZ is the Developer which is involved in the provision of service. Therefore, in accordance to Notification No. 18/2017- Integrated Tax (Rate) dated 05.07.2017, SEZ Unit is exempted from whole of the IGST leviable under Section 5 of IGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have any application in this case. Also, the reverse charge notifications were issued prior to the amendment to the SEZ Rules which has in order to align the same with GST Laws with effect from 19.09.2018. 20. To further add the over-riding effect of the SEZ Act and Rules have been upheld by Courts and Tribunal in the following judgement/order: 21. The Appellant relies on the judgment in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS (2019 (8) TMI 748) cited in support of the contention that the SEZ Act - Section 51 has overriding effect. 22. The reliance has also been placed upon the case of M/s Metlife Global Operations Support Center Private Limited Vs Commissioner, Service Tax, New Delhi 2020-VIL-560-CESTAT-DEL-ST. 23. Therefore, applying the ratio of the decisions mentioned above, the Appellant shall not be liable to payment of tax under RCM. 24. Alternatively, the Appellant submits that even for purpose of argument it is assumed that reverse charge notifications as aforesaid are applicable even then the SEZ unit in terms of Section 16 of the IGST 2017 could exercise the option to provide LUT as provided in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding judgements / clarifications rendered by competent Board or Courts or Tribunals. In context to above, Appellant relied on the judgment of Hon'ble Gujarat High Court in case of Darshan Boardlam Ltd vs. Union of India. 31. Further, the Appellant place reliance on Hon'ble Delhi High Court judgement issued in case of Interglobe Aviation Ltd Vs. Union of India and ANR. 32. It is a settled position of law that the department cannot take contradictory stand on the same facts and issue in different proceedings. For this submission appellant relied on the following decisions;- Damodar J. Malpani vs. CCE: 2002 (146) ELT 483 (SC) Ralli Enginer Ltd. vs. UOI: 2004 (4) TMI 590 - Guj. HC Steel Authority of India vs. CC, Bombay: 2000 (115) ELT 42 (SC) 33. The Appellant relied on the Hon'ble CESTAT ruling in case of CESTAT Mumbai Commissioner of Central Excise, Mumbai-III Versus M/S. Narendrakumar and Co. Therefore, the authorities should take into consideration the clarification issued by Ministry of Finance vide F. No 334/335/2017-TRU dated 18.12.2017. PERSONAL HEARING 34. The personal hearing in the matter was held on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the Appellant, being registered under the CGST Act, 2017, are liable to pay GST under RCM on the impugned transaction, i.e., supply of services of renting of immovable property by SEZ authority to them. 35.2 As regards the Circular No. 48/22/2018-GST dated 14.06.2018 cited by the Appellant, it is submitted that the aforesaid Circular deals with the types of supply as to whether a supply is to construed as inter-state or intra-state, and therefore, the said Circular is not applicable in the present case as the present case deals with the applicability of GST on the impugned services. 35.3 As regards the applicability of the provisions of section 16(3) of the IGST Act. 2017 read with Rule 30 of the SEZ Rules, 2006 as amended by the SEZ (Amendment) Rules, 2018, wherein the Appellant have advocated that they are entitled to avail the benefit of LUT in as much as they are not required to pay GST on the impugned services received from SEEPZ SEZ, it is submitted that SEEPZ SEZ. being a SEZ developer, will not be categorised as the supplier located in DTA, and hence the said rule 30 of the SEZ Rules, 2006, which permits the supplier to avail either of the two options, i.e., makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of GST thereon cannot be answered. The MAAR in the impugned order has inter alia observed that SEEPZ SEZ is a SEZ developer, and hence section 16(3) of the IGST Act. 2017 will not be applicable to the Appellant as the impugned supply of renting of immovable property services are taking place between the SEZ developer and SEZ unit, and not between a supplier located in DTA and SEZ unit as contemplate in the above provisions of section 16(3) ibid. 37. On perusal of the impugned Advance Ruling Order vis- a- vis the submissions made by the Appellant in defence of their case, the moot issues before us are as under:- (i) Whether the impugned supply of renting of immovable property services provided by the SEZ Authority is zero-rated supply in terms of section 16(1) of the IGST Act, 2017; (ii) Whether the supply of any other services by the suppliers located in DTA to the SEZ unit is zero-rated supply in terms of section 16(1) of the IGST Act. 2017; 38. Now, we set out to examine the first issue, i.e., whether the impugned supply of renting of immovable property services provided by the SEEPZ SEZ Authority to the SEZ unit. i .e., the Appellant, is zero-rated supply in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 16(1) ibid, will not be applicable in the Appellant's case as the impugned services of renting of immovable property is not being provided by the supplier located in DTA rather the same is being supplied by the SEZ developer, i.e., SEEPZ SEZ, hence the facility of LUT is not available to the Appellant as proposed by them. Thus, the contention put forth by the Respondent that the said services are being supplied by the SEZ developer, and not be supplier located in DTA does not hold water, and hence not sustainable. 40. From the provisions of section 16 (1) and Section 5 (3) of IGST Act it is clear that the intention of the legislature is not to tax the supplies made to a unit in SEZ or a SEZ developer, which has been made zero rated under clause (b) of section 16 (1) of the IGST Act. 2017. By virtue of deeming provision under section 5 (3) of the IGST Act, 2017, the levy on procurement of services specified in Notification 13/2017 CT (Rate) falls upon the unit in SEZ or SEZ developer. Therefore, a unit in SEZ or SEZ developer can procure such service for use in authorised operation without payment of integrated tax provided the actual recipient i.e. SE ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
