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2019 (1) TMI 1849 - AAR - GSTScope of Advance Ruling - Taxability - rate of tax - Polypropylene Leno Bags - HELD THAT - As per clause (c) of section 95 of the CGST/HGST Act, 2017, an applicant means any person registered or desirous of obtaining registration under this Act. Further, section 97(1) of the Acts ibid provides that an application for advance ruling may be submitted by an applicant desirous of obtaining an advance ruling under this Chapter by way of application submitted under rule 104 of the CGST/HGST Rules, 2017. However, as perused from the documents regarding registration of society, as enclosed with the application for advance ruling, it appears prima facie that Woven Fabric Bags Manufacturers Association itself is not in the business of goods in respect of which advance ruling is sought and it has merely submitted a representation in the shape of advance ruling application on behalf of members of association. Since, the association is not covered in the definition of applicant, as provided under clause (c) of section 95 of the CGST/HGST Act, 2017, it cannot seek advance ruling under section 97. Further, an opportunity of being heard has also been provided to the association on 24.12.2018 as required under second proviso to section 98(2), but since neither the applicant nor any authorized agent has appeared before the authority, the application can not be entertained. The application dated 09.10.2018, submitted by M/s. Woven Fabric Bags Manufacturers Association, for advance ruling is rejected.
Issues:
1. Eligibility of an association to seek advance ruling under the CGST/HGST Act, 2017. Analysis: The case involved M/s. Woven Fabric & Bags Manufacturers Association seeking an advance ruling under the CGST/HGST Act, 2017 regarding the taxability and applicable tax rate on Polypropylene Leno Bags. The Association, registered under the Haryana Registration and Regulation of Societies Act, 2012, submitted the application for advance ruling but failed to appear for the personal hearing. The Proper Officer, however, presented observations on the taxability issue. The Authority noted that as per the Memorandum of Association, the primary objectives of the Association were to safeguard the interests of units in a specific area and address their operational challenges with government departments. The Authority analyzed the definition of an "applicant" under section 95 of the CGST/HGST Act, 2017, which refers to any person registered or seeking registration under the Act. It was observed that the Association, not being directly engaged in the business of the goods in question but representing its members, did not meet the criteria of an applicant eligible for seeking an advance ruling. Despite providing an opportunity for a hearing as required by law, the Association did not appear, leading to the conclusion that the application could not be entertained. Consequently, the Authority rejected the application for advance ruling submitted by M/s. Woven Fabric & Bags Manufacturers Association, emphasizing that the Association's status did not align with the definition of an applicant as specified under the relevant provisions of the CGST/HGST Act, 2017. The decision was made based on the lack of direct involvement of the Association in the business activities related to the subject matter of the advance ruling application. The judgment highlighted the importance of adherence to statutory provisions and the necessity for applicants to meet the prescribed criteria for seeking advance rulings under the CGST/HGST Act, 2017. It underscored the need for direct engagement in the relevant business activities by the applicant, as defined by the law, to qualify for advancing ruling applications. The rejection of the application in this case was based on the Association's failure to meet the eligibility criteria, as outlined in the statutory provisions governing advance rulings.
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