2021 (8) TMI 527 - AAR - GST

Scope of Advance Ruling application - same issue pending with Revenue but under different provisions - Applicability of GST - proposed receipt of money in case of arbitration claims awarded for works contract completed in the Pre-GST regime - HSN Code - rate of GST - HELD THAT - Proviso to Sec 98(2) of CGST /APGST Act 2017 makes the following observation that it is a fit case for rejection as the applicant approached the Authority for Advance Ruling for clarification while it is still pending with the Revenue on the same issue but under different provisions i.e. under refund provisions of the Act. The application is not admitted.

Summary

Issues:
1. Applicability of GST on arbitration claims awarded for works contract completed in the Pre-GST regime.
2. Determination of HSN Code and GST rate for liability discharge.

Analysis:
1. The case involved an application filed by a civil engineering and construction company seeking clarification on the applicability of GST on arbitration claims awarded for works contract completed in the Pre-GST regime. The company had completed a project before the GST regime and faced disputes with the National Highway Authority of India (NHAI) regarding various claims. The applicant sought clarification on the GST liability arising from the arbitration awards received for these claims.

2. The applicant presented seven claims related to the project, including disputes over payment for executed work, non-payment of specific items, additional charges deducted incorrectly, extension of bank guarantees, and refund of increased VAT. The arbitration authority had passed awards in favor of the applicant for these claims, totaling to INR 14,57,37,158. The applicant raised questions on the GST applicability and the appropriate HSN Code and GST rate for discharging the liability.

3. The jurisdictional officers provided remarks indicating that no proceedings were passed on the applicant's issue seeking an advance ruling. However, pending proceedings existed regarding the applicant's works contract agreement with NHAI. The State Tax authorities mentioned a pending refund claim related to the issue. The applicant's authorized representative appeared for a personal hearing and reiterated the submission made in the application.

4. The Authority for Advance Ruling examined the admissibility of the application as per the relevant proviso to Section 98(2) of the CGST Act, which states that the application cannot be admitted if the question raised is already pending or decided in any proceedings under the Act. Considering the pending status of the issue with the Revenue under refund provisions, the Authority rejected the applicant's plea for admission of the application for advance ruling.

5. Consequently, the Authority issued an order stating that the application was not admitted due to the pending nature of the issue with the Revenue under different provisions of the Act. The application seeking clarification on the GST liability for arbitration claims awarded for works contract completed in the Pre-GST regime was thus not admitted by the Authority for Advance Ruling.