2020 (9) TMI 1166 - AAR - GST

Rectification of Mistake - Mistake apparent on the face of record or not - Liability to pay Service Tax / GST proportionate to the services provided before / after 30.06.2017 respectively - section 161 of the CGST/KGST Act 2017 - it was held in the case of IN RE M/S. DURGA PROJECTS AND INFRA STRUCTURE PRIVATE LIMITED 2019 (8) TMI 395 - AUTHORITY FOR ADVANCE RULING, KARNATAKA that the applicant is liable to pay GST towards work executed under Joint Development Agreement on Land Owner's portion, on the value to be arrived at in terms of para 2 of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, at the time of transfer of possession of the land owner's portion of the flats and that the tax liability arises entirely under the GST Law since possession of land owner's share of flats has not been given to the land owner till the inception of GST Law. HELD THAT - The applicant filed the instant application for ROM in the IN RE M/S. DURGA PROJECTS AND INFRA STRUCTURE PRIVATE LIMITED 2019 (8) TMI 395 - AUTHORITY FOR ADVANCE RULING, KARNATAKA , without bringing anything on record to negate the findings in the said order that the possession of land owner's share of flats was not handed over to the land owner till 30.06.2017. Further, the time of supply and point of taxation, for the purpose of valuation, are same in CGST Act 2017 (Notification No.04/2018-Central Tax (Rate) dated 25.01.2018) and Service Tax i.e. Finance Act 1994 (para 2.1 (B) (i) of Circular No.151/2/2012-ST dated 10.02.2012) i.e. liability shall arise at the time when the possession or right in the property of the said flats are transferred to the land owner by entering into a conveyance deed or similar instrument (eg. Allotment letter). It is clearly evident that the authority has considered all the submissions and issued proper orders. Hence there is no error / apparent mistake on the face of the record in the case of IN RE M/S. DURGA PROJECTS AND INFRA STRUCTURE PRIVATE LIMITED. The applicant filed the instant application for ROM, under Section 161 of the CGST Act, 2017 whereas Section 102 of the CGST Act 2017 is the relevant one for filing the application for rectification of advance ruling - the instant application is not maintainable and is liable for rejection in terms of Section 98(2) of the CGST/KGST Act 2017 and hence the same is dismissed as inadmissible..

Summary

Issues:
Rectification of mistake in advance ruling due to differing judgments on similar case facts.

Analysis:
The applicant sought rectification of a mistake in the advance ruling, claiming significant differences between the ruling in their case and another case with similar facts. The applicant alleged that the rulings in both cases differed in terms of the construction service provided in the pre-GST regime and completed in the GST regime under a Joint Development Agreement. In one ruling, it was stated that the applicant is liable to pay GST, while in another ruling, it was mentioned that the applicant is liable to pay Service Tax/GST proportionate to the services provided before/after 30.06.2017. The applicant appeared for a personal hearing and reiterated their submissions.

Upon discussion and findings, it was noted that the rulings in question had considered all submissions and issued proper orders. The authority found that there was no error or apparent mistake in the initial ruling. It was highlighted that the applicant had not provided any evidence to contradict the findings that possession of the land owner's share of flats was not transferred until 30.06.2017. The time of supply and point of taxation under the CGST Act 2017 and Service Tax were found to be the same, indicating that the rulings were in line with the relevant laws and discussions therein.

The authority pointed out that the applicant had filed the rectification of mistake application under the wrong section of the CGST Act 2017. The relevant section for such applications is Section 102, not Section 161. As per Section 98(2) of the CGST Act 2017, the application was deemed inadmissible and was dismissed.