2019 (4) TMI 807 - AAR - GST

Maintainability of Advance Ruling Application - deposit of fees - Liability of the applicant for obtaining registration - Section 22 of the GST Act - Held that - Applicant is an un-registered person under the provisions of GST Act. After the receipt of application, applicant was called on for preliminary hearing to examine the correctness of the application and to give interim decision on acceptance or rejection of the application as provided u/s 98 of the GST Act. For an applicant, it is mandatory as per section 97(1) read with Rule 104 of the CGST/ MGST Act to pay applicable fee of ₹ 5000/- each under SGST and CGST Act to be deposited in the manner as provided under Section 49 of the Act. If not, the application would be treated as an incomplete application liable for rejection - Details regarding the payment of fee for the filing an application for advance ruling has been clarified vide Circular No. 25/25/2017-GST by GOI, Ministry of finance, Department of Revenue, Central Board of Excise and Customs, GST Policy Wing, New Delhi dated 21st December, 2017 wherein, at point no. 4 it is clarified that the applicant can make the payment of the fee of ₹ 5000/- each under CGST Act and SGST Act. In the instant case, the applicant has only deposited an amount of ₹ 5000/- towards fees and not the full amount of ₹ 10000/-. The opportunity so far granted to the applicant in our opinion constitute sufficient opportunity to cure the defect which applicant has failed to avail. As such application is incomplete and is liable for rejection. The Application for advance ruling is rejected as being not maintainable.

Summary

Issues involved:
- Implication of facts on Sec. 22 of GST Act under various situations

Analysis:
1. Rent from House property:
The rent received from a commercial organization for an unoccupied portion of an immovable property is taxable under GST if the income exceeds ?20 lakhs. This is in line with Notification No.12/2017-CT(Rate) where renting of residential dwellings for use as a residence is exempted from GST. However, if the property is not used as a residence, it becomes taxable under GST.

2. Interest Income from Finance Activity:
Interest income from activities such as extending deposits, loans, or advances is generally exempt from GST, as per Notification No.12/2017-CT(Rate). However, certain components like service charges, administrative charges, or additional interest due to default in payment are taxable under GST. Interest on finance lease transactions is also taxable under GST. The lack of detailed disclosure of interest income from finance activities in the application was noted.

3. Remuneration and profits from Firm:
Remuneration and profits received as a working partner in a firm are not considered a service and thus not liable for GST. This exemption applies to the applicant in this scenario.

4. Application Completeness and Fee Payment:
The applicant failed to pay the full required fee of ?10,000 as mandated under Section 97(1) read with Rule 104 of the CGST/MGST Act. The incomplete payment of fees rendered the application liable for rejection, as clarified in Circular No. 25/25/2017-GST. Despite opportunities provided to rectify the deficiency, the applicant did not comply, leading to the rejection of the application.

5. Final Order:
Considering the incomplete payment of fees and the failure to rectify the deficiency despite opportunities provided, the application for advance ruling was rejected as not maintainable under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017.

This detailed analysis of the legal judgment highlights the implications of various income sources on the applicability of GST registration under Section 22 of the GST Act. It also emphasizes the importance of complying with fee payment requirements for maintaining the validity of an advance ruling application.