Advance ruling application can’t be rejected only because applicant is not a supplier: AAAR

Case Details: Appellate Authority for Advance Ruling, Maharashtra Portescap India (P.) Ltd., In re - [2022] 138 taxmann.com 465 (AAAR-MAHARASHTRA)

Judiciary and Counsel Details

• • Rakesh Kumar Sharma & Sanjeev Kumar, Member
  • Thirumalai, Adv. for the Appellant.

Facts of the Case

The Appellant was an SEZ Unit and engaged in exports of the manufactured goods outside India. It filed an application for advance ruling to determine whether tax would be payable under Reverse Charge Mechanism (RCM) on procurement of domestic services like “renting of immovable property services”. The Authority for Advance Ruling (AAR) held that advance ruling application is not maintainable in terms of section 95(a) of CGST Act, 2017 as applicant was recipient of supply and not supplier. It filed appeal against the order.

AAAR Held

The Appellate Authority for Advance Ruling observed that it is only the supplier of goods or services or both, who is eligible to file application for advance ruling in respect of the questions specified under section 97(2) of the CGST Act, 2017. However, recipient of supply can seek advance ruling where tax is payable under reverse charge in terms of section 9(3) of CGST Act as section deems recipient of supply to be supplier and all provisions of CGST Act are applicable to recipient which includes right to seek advance ruling. Therefore, the appellant was eligible to file advance ruling application wherein advance ruling was sought as to whether GST would be payable under RCM on services of ‘renting of immovable property’ received from SEZ authority.

List of Cases Reviewed

• • Portescap India (P.) Ltd., In re, [2020] 117 taxmann.com 590/82 GST 142 (AAR – Maharashtra) (para 17) reversed.
  • Sutherland Mortgage Services Inc. v. Principal Commissioner of Customs, Central GST and Central Excise, [2020] 115 taxmann.com 82 (Ker.) (para 14) followed.

List of Cases Referred to

• • Portescap India (P.) Ltd., In re [2020] 117 taxmann.com 590/82 GST 142 (AAR – Maharashtra) (para 2)
  • GMR Aerospace Engineering Ltd. v. Union of India [2019] 111 taxmann.com 103 (Telangana & AP) (para 5.8)
  • Sutherland Mortgage Services Inc. v. Pr. Commissioner [2020] 115 taxmann.com 82 (Ker.) (para 7.1)
  • Penguin Trading and Agencies Ltd., In re [2019] 111 taxmann.com 138/[2020] 77 GST 654 (AAAR – Odisha) (para 7.2)
  • Naga Ltd., In re [2018] 100 taxmann.com 15/[2019] 71 GST 238 (AAR – Tamil Nadu) (para 7.3).