2021 (11) TMI 394 - AAR - GST

Scope of Advance Ruling - Classification of goods or services or both - HSN or SAC - transporting the steel structures fabricated at their Noida premises to the work site at Karwar as the L T (main contractor) - composite supply or not - requirement of registration - HELD THAT - In the instant case the applicant is neither seeks the classification of goods nor services but seeks whether the HSN or SAC that need to be mentioned in the invoice. Thus the question is not covered under the issues mention in Section 97 (2) of the CGST Act 2017. In view of the foregoing the authority refrain from answering this question at it is not within the jurisdiction of this authority - it is pertinent to note that the invoice is issued for the supply of goods or services or both and when it is mandated to mention the HSN in the invoice the HSN covering the transaction in this case the supply of services needs to be mentioned. But in case of e-waybill the movement is of goods and hence the delivery note causing the movement of goods needs to be raised and the HSN of the goods moved and the value of such goods moved needs to be recorded in such e-waybill. Whether the applicant is required to be registered in the state of Karnataka for execution of the work order which was issued by M/s L T Karnataka on the applicant s premises registered at Noida UP from where the applicant raises the invoice? - HELD THAT - In the instant case the applicant has obtained registration for the premises located at Noida UP and hence the location of the supplier of services is the place of business of the applicant. It is also pertinent to note that the applicant has no fixed establishment in the State of Karnataka as on date. Section 12 of the IGST Act 2017 determines the place of supply and specifically Section 12 (3) of the IGST Act is relevant to the impugned transaction determines the place of supply of services directly in relation to immovable property in respect of any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work or any ancillary services shall be the location at which the immovable property is located or intended to be located and if the location of the immovable property is located or intended to be located outside India the place of supply shall be the location of the recipient - in the instant case the place of supply of services is the location at which the immovable property is located i.e. Karwar in Karnataka state. In the instant case the applicant has only one principal place of business (Noida UP) for which registration has been obtained and does not/intended to have any other fixed establishment other than the principal place of business as admitted by the applicant. Therefore the location of the supplier itself is the principal place of business which is in Noida Uttar Pradesh. Thus there is no requirement for a separate registration in Karnataka for execution of the contract - the nature of supply is of inter-State supply and the applicant can supply the impugned services from the place of registration i.e. Noida UP on raising the invoice from the said place by charging IGST. Whether the applicant obtain the ISD registration avail the ITC of the tax paid on the services procured from the suppliers in Karnataka at the site i.e. Karwar Karnataka and distribute the same to their registration at Noida UP? - HELD THAT - It could be seen from the definition under Section 2(61) of the CGST Act that the Input Service Distributor is an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit (ITC). Thus to distribute the ITC the supplier should obtain the Input Service Distributor registration for the premises from where they intend to distribute the credit. It is an admitted fact that the applicant neither have nor intend to have any establishment at the site at Karwar Karnataka and hence cannot obtain the ISD registration.

Summary

Issues Involved:
1. Classification of services and the use of SAC or HSN codes in tax invoices.
2. Requirement for registration in Karnataka for executing the works contract.
3. Registration as an Input Service Distributor (ISD) and distribution of Input Tax Credit (ITC).

Detailed Analysis:

Issue 1: Classification of Services and Use of SAC or HSN Codes
The applicant sought clarification on whether to use SAC or HSN codes in the tax invoices for goods moved from Noida to Karwar for a works contract. The main contractor, L&T, classified the entire contract as a service under SAC 995416, raising concerns about discrepancies in e-way bills which require HSN codes for goods.

- Ruling: The authority refrained from providing a ruling on this issue, stating it is beyond their jurisdiction as per Section 97(2) of the CGST Act 2017. However, they noted that invoices for services should mention the SAC, while e-way bills for goods movement should mention the HSN code of the goods being transported.

Issue 2: Requirement for Registration in Karnataka
The applicant questioned whether they needed to register in Karnataka to execute the works contract, given that they are registered in Noida, Uttar Pradesh.

- Ruling: The applicant does not need a separate registration in Karnataka. They can raise invoices from their registered office in Noida, UP, charging IGST with the place of supply being Karnataka. The authority referenced Section 22(1) of the CGST Act 2017, which requires registration in the state from where the taxable supply is made. Since the applicant's principal place of business is in Noida and they have no fixed establishment in Karnataka, registration in Karnataka is not required.

Issue 3: Registration as Input Service Distributor (ISD)
The applicant inquired if they should register as an ISD in Karnataka to distribute ITC for services procured locally.

- Ruling: The applicant cannot obtain ISD registration in Karnataka as they do not have and do not intend to have any establishment in Karnataka. The authority cited Section 2(61) of the CGST Act 2017, which defines an ISD as an office that receives tax invoices and distributes ITC. Since the applicant lacks an establishment in Karnataka, they cannot register as an ISD there.

Conclusion:
1. HSN or SAC Codes: No ruling provided; invoices for services should use SAC, and e-way bills for goods should use HSN.
2. Registration in Karnataka: Not required; invoices can be raised from Noida, UP, charging IGST.
3. ISD Registration: Not possible without an establishment in Karnataka.