2018 (5) TMI 2113 - AAAR - GST

Exemption from GST - outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships - HELD THAT - The applicant has raised a new issue for clarification, which was not placed before the Advance Ruling Authority, i.e. to decide whether the transactions are export (zero rated) or not. Hence, the Advance Ruling Authority are directed to issue necessary ruling after hearing the applicant afresh, and taking a wholistic view of the applicant's plea. The Advance Ruling Authority must decide the case within 90 days of receipt of this order. The matter is remanded back to Advance Ruling Authority.

Summary

Issues:
1. Exemption from tax under GST on outward supplies to specified vessels.
2. Collection of GST from recipients for specific goods.
3. Clarification on transactions falling under zero-rated supplies.
4. Review of ruling by Advance Ruling Authority.

Analysis:

Issue 1: Exemption from tax under GST on outward supplies to specified vessels
The Appellate Authority for Advance Ruling dealt with the issue of whether the appellant is exempt from tax under GST on outward supplies made to ocean-going merchant vessels on foreign runs, Indian Naval Ships, and Indian Coast Guard Ships. The Advance Ruling Authority had ruled that the appellant is not exempt from tax on such supplies. The appellant, aggrieved by this ruling, filed an appeal before the Appellate Authority seeking a review.

Issue 2: Collection of GST from recipients for specific goods
Additionally, the appellant sought clarification on whether they are liable to collect GST from the recipients for the specific goods supplied to the vessels mentioned above. The Advance Ruling Authority had stated that the appellant can collect applicable GST from customers for non-export supplies. However, for exports, the appellant had the option to decide whether to export under bond or on payment of tax.

Issue 3: Clarification on transactions falling under zero-rated supplies
The appellant raised concerns regarding the Advance Ruling Authority's observation that some supplies may fall under the definition of 'exports,' which are considered zero-rated supplies. The appellant argued that the ARA did not clarify which transactions specifically fall under zero-rated supplies, citing Circular No. 21/31/63 Cus.IV, Dated 17th Aug 1966. The appellant requested a review of this aspect and clarification on whether their transactions qualify as zero-rated exports.

Issue 4: Review of ruling by Advance Ruling Authority
During the appeal process, the appellant presented new issues for clarification that were not initially raised before the Advance Ruling Authority. The appellant requested a decision on whether their transactions could be classified as export (zero-rated) or not. The Appellate Authority directed the Advance Ruling Authority to issue a necessary ruling after hearing the appellant afresh and considering a holistic view of the appellant's plea. The Advance Ruling Authority was instructed to decide the case within 90 days of receiving the order, and the matter was remanded back to the Advance Ruling Authority for further review and clarification.