2020 (1) TMI 976 - AAR - GST

Maintainability of Advance Ruling application - Classification of GST - service provided in relation to on field testing for Bio Efficacy, Phyto-toxicity and other tests on plants for evaluation of insecticide - rate of GST - HELD THAT - On perusal of letter dated 24.07.2019 of Deputy Commissioner (STF), Rudrapur, we find that the investigation against the applicant is being carried out on various services including testing of soil and other laboratories services and the said fact is also communicated by the Joint Commissioner, SGST, Rudrapur vide his letter dated 03.10-2019. Since the question raised in the application is pending with SGST Authorities under the provisions of this Act, therefore as per proviso to section 98(2) of the Act the said application filed by the applicant is hereby not admitted.

Summary

Issues:
Identification of HSN code for on-field testing services and determination of applicable tax rate and exemptions.

Analysis:
1. The application was filed under Sub-Section (1) of Section 97 of the CGST/SGST Act, seeking advance ruling on the classification and applicable tax rate for services provided. The applicant, a registered entity, inquired about the HSN code for "on field testing for Bio Efficacy, Phyto-toxicity and other tests on plants for evaluation of insecticide" and the relevant tax rate along with any exemptions applicable.

2. Advance ruling under GST involves decisions by the authority on specified matters related to the supply of goods or services. The applicant sought clarification on the classification and tax implications of the services they provide, falling under the purview of Section 97(2)(a) & (e) of the Act, which led to the admission of their application for a ruling.

3. During the proceedings, it was revealed that an inquiry was being conducted by the Deputy Commissioner, STF, SGST-Rudrapur, regarding testing services. This development prompted a notice to show cause to the applicant, questioning the validity of their application under the proviso to Section 98 of the Act.

4. The applicant defended their position during the hearing, stating that they were paying GST at 18% for the services in question. They refuted claims of ongoing inquiries related to testing services, asserting that they had fulfilled their tax obligations, and any allegations were baseless. The applicant emphasized their compliance and requested the admission and merit-based decision on their advance ruling application.

5. Reports from authorities confirmed the applicant's GST payments at 18% for the services and ongoing investigations into services under SAC- 9986. The investigation encompassed various services, including testing of soil and laboratory services, as communicated by the Joint Commissioner, SGST, Rudrapur.

6. Ultimately, the Advance Ruling Authority decided not to admit the applicant's application, citing that the question raised was already under consideration by the SGST Authorities. As per Section 98(2) of the Act, the application was rejected based on the proviso that prevents admission when the question is pending or decided in other proceedings related to the applicant under the Act.