2019 (4) TMI 1944 - AAAR - GST

Scope of Advance Ruling application - applicant is not the service provider - eligible party to seek for Advance Ruling - Section 98(2) of GST Act - liability to pay tax on the services supplied to them and not on the supplies made by them - HELD THAT - The interpretation of the Authority for Advance Ruling that the applicant is recipient of the services and not supplier of services is arbitrary, illegal, against the APGST Act, 2017 as the applicant is stake holder and the services are undertaken by the applicant - The applicant who is the Authority for undertaking the above works, providing and sanctioning taxes in the estimates on behalf of Govt., authority for implementation of APGST Act, 2017. He is also an authority for applying TDS under APGST Act, 2017 and it cannot be said that the applicant is not in relation to the supply of goods or services or both being undertake or proposed to be undertaken as per definition of Advance Ruling under Section 95(a) - The applicant who is also an authority for applying TDS under APGST Act, 2017 has no other option to get clarification on the above applicability of GST for the said works other than from the Authority for Advance Ruling/Appellate Authority for Advance Ruling. As per the definition of Advance Ruling, it is very clear that the application can be made by the person who is in relation to the goods or services taken up or proposed to be taken up. The applicant failed to comply with the provisions of Rule 106 of the APGST Act - Accordingly the DFO, Chintur was informed vide this office ref. No. CCST/AAAR/01/2019, dated 5-3-2019 to comply with the requirement as per the Act, but no response has been received by this office from the applicant. However, a notice for personal hearing on 12-3-2019 has been sent to the applicant vide this office reference dated 3-4-2019, duly providing an opportunity for hearing. Appeal rejected.

Summary

Issues involved:
1. Applicability of GST on forestry works including extraction, transportation, and maintenance activities.
2. Eligibility to seek Advance Ruling under the APGST Act, 2017.
3. Compliance with procedural requirements for filing an appeal to the Appellate Authority for Advance Ruling.

Detailed Analysis:

Issue 1: The applicant, engaged in forestry works, sought clarification on the applicability of GST to extraction, transportation, and maintenance activities involving timber and bamboo. The Authority for Advance Ruling held that the applicant was not the service provider but the recipient of services from contractors. The ruling stated that the applicant did not make the supplies in question and rejected the application, emphasizing the liability to pay tax on services received, not on supplies made. The applicant challenged this decision, arguing that they were responsible for tax provisions, undertook the services, and should be considered a stakeholder under the APGST Act, 2017.

Issue 2: The appellant contended that they were eligible to seek an Advance Ruling as they were involved in the forestry works and had a direct role in tax compliance and implementation. They argued that the interpretation by the Authority for Advance Ruling was arbitrary and against the spirit of the APGST Act, as they were actively engaged in the services and should be considered a party eligible for seeking clarification under Section 95A of the Act.

Issue 3: The Appellate Authority for Advance Ruling highlighted procedural lapses in the appellant's appeal, noting non-compliance with Rule 106 of the APGST Act. The appellant failed to submit the appeal in the prescribed format and did not accompany the appeal with the required fee. Despite being informed to comply with the Act's provisions, the appellant did not respond adequately, leading the Authority to reject the appeal without delving into the merits of the case due to procedural deficiencies.

In conclusion, the judgment addressed the issues of GST applicability on forestry works, eligibility for seeking Advance Ruling, and compliance with procedural requirements. The decision emphasized the distinction between service providers and recipients, the responsibilities of stakeholders in tax compliance, and the importance of adhering to procedural rules for seeking legal remedies under the APGST Act, 2017.