2018 (12) TMI 1733 - AAR - GST

Scope of Advance Ruling application - section 97 of CGST Act - levy of GST - rate of GST - Extraction of timber / bamboo from Natural Forest - Transportation of Timber / bamboo from Natural Forest to the Government depots - Maintenance of Government depots like classification / grading of timber bamboo and wages to mastris for supervision - HELD THAT - An applicant can seek an advance ruling in relation to supply of goods or services or both undertaken or proposed to be undertaken by the applicant - Further, as per Section 103 (1) of the APGST Act such an Advance Ruling is binding only on the applicant and on the Officer Concerned or the jurisdictional Officer in respect of the applicant. In the present case the applicant is recipient of the services and not supplier of such services - the application is not liable for admission and therefore rejected without going in to the merits of the case.

Summary

Issues Involved:
Applicability of GST on extraction of timber/bamboo, transportation to government depots, and maintenance works at government depots.

Analysis:
The Divisional Forest Officer, Logging Division, Chintur sought an advance ruling on the applicability of GST for various activities related to extraction of timber and bamboo, transportation to government depots, and maintenance works at the depots. The applicant collected GST from bidders and deposited it in the GST account. The activities involved open tender system, piece work contract method, and engagement of local tribal laborers. The questions raised by the applicant pertained to the percentage of GST applicable and the relevant HSN codes for each activity.

The Authority for Advance Ruling examined the case and determined that the applicant was not making any supplies but was the recipient of services provided by contractors. As the questions raised were related to the liability to pay tax on services received, not on supplies made by the applicant, the application was deemed inadmissible. The legal provisions under Section 95(a) of CGST and APGST Act define advance ruling as a decision on matters specified in the Act regarding the supply of goods or services undertaken or proposed by the applicant.

The ruling stated that the application for advance ruling by M/s. Divisional Forest Officer, Logging Division, Chintur was rejected under subsection 2 of Section 98 of the CGST Act, 2017, and the APGST Act, 2017. Despite the detailed submission and personal hearing, the ruling concluded that the applicant's queries were not directly related to the supplies made by them but rather to the liability to pay tax on services received, leading to the rejection of the application for advance ruling.

This judgment clarifies the distinction between liability to pay tax on services received and supplies made, emphasizing the recipient's position in seeking an advance ruling. The ruling provides insights into the application of GST in the forestry sector, particularly concerning the extraction, transportation, and maintenance activities carried out by government departments.