2019 (10) TMI 561 - AAR - GST

Permission for withdrawal of Advance Ruling application - export of goods or not - sale of the Aircraft by the Official Liquidator to a buyer located outside - refund of the GST and the compensation cess paid - HELD THAT - The application filed by the Applicant for advance ruling is disposed off as withdrawn.

Summary

Issues:
1. Whether the sale of the Aircraft qualifies as an "Export of goods" under GST law.
2. Determination of the place of supply if the sale does not qualify as an export.
3. Applicability of correct GST rate and compensation cess on the sale of the Aircraft.
4. Whether the Buyer can claim a refund of GST and compensation cess.

Analysis:
1. The Applicant, an official liquidator, sought an advance ruling on the classification of the sale of an Aircraft to a buyer outside India as an "Export of goods" under GST law to avail zero-rated supply benefits. The key consideration was whether the invoice raised on the foreign buyer and the intended export of the Aircraft post-repairs constituted an export transaction. The ruling was sought under Section 97 of CGST Act 2017 and KGST Act 2017.

2. In case the sale did not qualify as an export, the Applicant inquired about the determination of the place of supply for the Aircraft. This issue arises when the goods do not meet the criteria for export under the GST law, leading to the need for clarity on the applicable provisions for determining the place of supply in such a scenario.

3. Another aspect of the ruling involved the correct GST rate applicable on the Aircraft, considering its use for commercial purposes by a corporate legal entity in the USA. The Applicant questioned whether the aircraft could be classified under Tariff item 8802 and if the GST rate of 5 percent as per Entry 244 of Schedule I would apply. Additionally, the query regarding the levy of GST compensation cess on the sale of second-hand goods was raised to understand the tax implications.

4. Lastly, the Applicant sought clarification on the Buyer's eligibility to claim a refund of the GST and compensation cess paid on the transaction, assuming it qualified for zero-rating benefits. This issue pertained to the procedural aspect of claiming refunds on taxes paid in case of zero-rated supplies, highlighting the importance of understanding the refund mechanisms under the GST regime.

Conclusion:
The Authority for Advance Ruling, Karnataka, disposed of the application as withdrawn at the Applicant's request, citing completion of the sale and shipment of the Aircraft as reasons for withdrawal. Despite the withdrawal, the ruling provided insights into the complex GST implications surrounding the sale of goods, exports, tax rates, and refund mechanisms, contributing to the jurisprudence on these crucial aspects of indirect taxation.