2021 (12) TMI 1142 - AAR - GST

Scope of Advance Ruling - Exempt goods or not - raw water that is supplied through tankers through the Bookwater platform - does the supplier of water through tankers come under supply of raw water or under transport services? - withholding of tax from the suppliers before making payments for the supply of raw water through our platform - transaction through an e-commerce operator - GST Registration applicable for all suppliers through the Bookwater platform - withholding of tax from the suppliers before making payments since the supplies have been made through our digital platform - HELD THAT - It is evident that advance ruling are decisions on questions specified in sub section 97(2) of the Act in relation to the supply of goods or services undertaken or proposed to be undertaken by the applicant seeking the some. Hence, supplies undertaken or proposed to be undertaken by the applicant alone are covered under the advance ruling as per Section 95(a) of the Act. The Act limits the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2) and no other issue can be decided by the Advance Ruling Authority. Section 52(1) of the Act, provides for collection of an amount calculated @1% on the net value of taxable supplies made through it by other suppliers. Thus, it is evident that the provision itself clearly distinguishes that the e-commerce operator is different from the Suppliers . As per Section 95(a) read with Section 103 (applicability of the Ruling), it is clear that the ruling is applicable to the supply being made or proposed to be made and the ruling extended is binding only on the Supplier who makes such supply, his jurisdictional officer and the concerned officer. In the case at hand, the applicant seeks ruling on the supplies being made through their platform by the Concerned suppliers mentioned at Section 52 and the questions raised are not on the supplies being made or proposed to be made by him. Further, the provision at 97(2)(e) allows this authority to admit questions on determination of the liability to pay tax. The applicant, who is an e-commerce operator, and not the supplier of Raw water and Sewage Evacuation Services, the question raised on the classification of supply, applicability of Notification for such suppliers, is not the question on supplies being or proposed to be undertaken by him. Therefore, there are no hesitation, to hold that the questions raised, do not pertain to the supply of the applicant and are not admissible for ruling as per Section 95(a)/103 read with Section 97(2) of the Act. Further, the applicant has sought ruling as to whether the applicant is to withhold TCS from the suppliers before making Payments to the Concerned suppliers . Section 52 of the Act governs the collection of amount by e-commerce operator in respect of supplies made through Such e-Commerce. The ambit of Advance Ruling do not provide for answering the questions raised on provisions relating to Tax Collected at Source provided under Section 52 of the Act. Further the amount collected as TCS is not in the nature of Tax - the questions are also not covered under the ambit of this authority as per Section 97(2) of the Act. The application are not admitted and the same is rejected.

Summary

Issues Involved:
1. Exemption status of raw water supplied through tankers via the Bookwater platform.
2. Classification of the supply of water through tankers as raw water supply or transport services.
3. Requirement for Bookwater to withhold GST TCS (1%) from suppliers before making payments for raw water.
4. GST registration requirement for suppliers making raw water sales through an e-commerce operator.
5. Applicability of 18% GST on sewage evacuation services and the exemption limit for suppliers with turnover less than ?20 Lakhs.
6. GST registration applicability for all suppliers through Bookwater platform based on turnover.
7. Requirement for Bookwater to withhold GST TCS (1%) from suppliers for services rendered through the digital platform.

Detailed Analysis:

Issue 1: Exemption Status of Raw Water
The applicant inquired if raw water supplied via tankers through the Bookwater platform is exempt from GST. The ruling highlighted that raw water, classified under HSN Code 2201, is listed as exempt goods. Therefore, the supply of raw water through the platform retains its exempt status.

Issue 2: Classification of Supply
The applicant questioned whether the supply of water through tankers should be classified as raw water supply or transport services. The ruling clarified that the principal supply is the sale of raw water, with the tankers serving merely as the mode of transport. Since no separate transport charges are levied, the supply remains classified as the sale of raw water, not as a transport service.

Issue 3: Withholding GST TCS (1%) for Raw Water
The applicant asked if they need to withhold GST TCS (1%) from suppliers before making payments for raw water. The ruling stated that under Section 52 of the CGST Act, TCS is applicable only on taxable supplies. Since raw water is an exempt supply, the requirement to collect TCS does not apply.

Issue 4: GST Registration for Suppliers
The applicant sought clarification on whether suppliers making raw water sales through an e-commerce operator need to register under GST. The ruling referred to Section 23 of the CGST Act, which exempts individuals exclusively supplying exempt goods from GST registration. Therefore, suppliers of raw water through the Bookwater platform are not required to register under GST.

Issue 5: GST on Sewage Evacuation Services
The applicant queried if sewage evacuation services are subject to 18% GST and if the exemption limit of ?20 Lakhs applies to individual suppliers. The ruling confirmed that sewage evacuation services fall under SAC 999411 and 999412 and are taxable at 18%. However, suppliers with a turnover below ?20 Lakhs are exempt from GST registration, as per Notification No. 65/2017-Central Tax, amended by Notification No. 06/2019-Central Tax.

Issue 6: GST Registration Based on Turnover
The applicant asked if GST registration is required for all suppliers through the Bookwater platform or only those with a turnover exceeding ?20 Lakhs. The ruling reiterated that suppliers with a turnover below ?20 Lakhs are exempt from GST registration, aligning with the notifications mentioned above.

Issue 7: Withholding GST TCS (1%) for Services
The applicant inquired if they need to withhold GST TCS (1%) from suppliers for services rendered through the digital platform. The ruling stated that TCS is applicable only when the supplier has a valid GSTIN. Since most suppliers have a turnover below ?20 Lakhs and are not registered, TCS withholding is not required. However, for registered suppliers, TCS at 1% must be collected and remitted.

Conclusion:
The ruling concluded that the questions raised by the applicant do not pertain to the supplies made or proposed to be made by them as an e-commerce operator. The authority held that the questions are not admissible for ruling under Section 95(a)/103 read with Section 97(2) of the Act. Specifically, the questions on the classification of supply, applicability of notifications, and TCS provisions were deemed outside the scope of the Advance Ruling Authority. Therefore, the application was rejected.