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2019 (3) TMI 592 - AAR - GSTMaintainability of advance ruling application - Section 97 of GST Act - whether or not the additives undertaken by the applicant pertains to matters or questions specified in Section 97(2)? - Held that - The applicant is not supplier of services . He is recipient of services from their supplier who leased circuit facility to the applicant and as such by virtue of section 95 is not an applicant who an obtain advance ruling unless the recipient is paying the taxes under reverse charge mechanism on the transaction of receipt of supply. In the present case applicant is recipient of services and he has not a paying the taxes under reverse charge mechanism on the impugned transaction in GST ACT. Hence, we find that the applicant has not satisfied the conditions of section 95 of CGST Act. The present application seeking ruling on questions stated hereinabove is not maintainable and liable for rejection.
Issues Involved:
1. Whether the supplier should charge Integrated Tax (IGST) on the supply of leased circuit facilities installed in multiple states without state-wise service proportion. 2. Whether the recipient can avail Input Tax Credit (ITC) on the tax charged by the supplier of the leased circuit facility. Issue-wise Detailed Analysis: 1. Charging of Integrated Tax (IGST): The applicant, engaged in providing internet connectivity services, sought clarity on whether IGST should be charged on leased circuit services installed across multiple states when the contract does not specify the proportion of service provided in each state. The applicant argued that the place of supply for such services should be determined as per Section 12(11) of the IGST Act, which states that if the leased circuit is installed in more than one state and the value of the service cannot be determined, the place of supply should be the location of the recipient of services. The applicant further contended that since no specific rules have been prescribed under Section 12(11)(d) of the IGST Act, the place of supply should default to the recipient's location, thereby necessitating the charging of IGST. They also referenced the case of Suresh Kumar Bansal v. Union of India, asserting that if no mechanism exists to ascertain the value of a particular service, the service should be considered outside the levy of tax. 2. Admissibility of Input Tax Credit (ITC): The applicant also sought a ruling on whether they could avail ITC on the IGST charged by the supplier of the leased circuit facility. They argued that since the leased circuits are essential for providing internet connectivity services, the tax paid on such services should be eligible for ITC as per Section 16 of the CGST Act, which allows ITC for taxes paid on goods or services used in the course or furtherance of business. Observations: The Authority for Advance Ruling (AAR) noted that the applicant is the recipient of the services, not the supplier. As per Section 95 of the CGST Act, only the supplier of goods or services can seek an advance ruling unless the recipient is liable to pay tax under the reverse charge mechanism. Since the applicant is not paying taxes under reverse charge for the leased circuit services, they do not qualify to seek an advance ruling. The AAR also highlighted that the applicant's question about charging IGST does not fall under the matters specified in Section 97(2) of the CGST Act, which lists the permissible questions for an advance ruling. Consequently, the application was deemed inadmissible. Conclusion: The application for advance ruling was rejected as the applicant, being the recipient of services and not paying taxes under reverse charge, does not qualify to seek an advance ruling under Section 95 of the CGST Act. Additionally, the questions raised do not pertain to matters specified in Section 97(2) of the Act.
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