AAR Can’t Decide GST Liability Beyond Its Jurisdiction | Gujarat AAR

Case Details: 63 Ideas Infolabs (P.) Ltd., In re - [2025] 181 taxmann.com 431 (AAR-GUJARAT)

Judiciary and Counsel Details

• Sushma Vora & Vishal Malani, Member
• N.R. Badrinath for the Applicant.

Facts of the Case

The applicant engaged in wholesale trading of agricultural produce and staples across India, had developed a supply chain management platform accessible through its website. It was submitted that consideration for such supply of services would be received from foreign clients in the form of non-voting, irredeemable preference shares issued by the overseas entity. The applicant sought an advance ruling on whether receipt of consideration in such form would fulfil the requirement of receipt of consideration in convertible foreign exchange and, consequently, whether there would be no liability to pay GST on the supply of services to overseas clients. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the primary issue raised by the applicant pertained to whether export proceeds received in the form of non-voting, irredeemable preference shares of a foreign entity satisfy the condition of receipt of consideration in convertible foreign exchange as per Section 2(6) of the IGST Act. It was held that this foundational question does not fall within the scope of matters on which an advance ruling can be pronounced under Section 97 of the CGST Act. It was further held that unless the primary issue relating to convertible foreign exchange is decided, the consequential question regarding GST liability on the supply of services cannot be examined.

List of Cases Referred to

• Malabar Gold (P) Ltd., In re [2023] 78 GSTL 129 (AAR-GST-Ker) (para 5)
• J.B. Boda & Co. (P.) Ltd. v. CBDT [1996] 89 Taxman 311 (SC) (para 5).