2022 (3) TMI 393 - AAR - GST

Classification of supply - supply of goods or supply of services or supply of goods and services - applicability of Entry No 2 of the N/N. 12/2017‐ Central Tax Rate dated 28.06.2017 - HELD THAT - In terms of clause (a) of section 95 of the GST Act, an advance ruling means a decision provided by this Authority or the Appellate Authority, as the case may be, on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the GST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In the instant case, the questions on which the applicant seeks advance ruling are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant rather it is found to be in relation to supply being received by him. This Authority cannot provide a decision to the applicant in the form of an advance ruling and the instant application is, therefore, liable for rejection - application is rejected in terms of sub-section (2) of section 98 of the GST Act.

Summary

Issues:
1. Interpretation of the transaction as supply of goods, supply of services, or both.
2. Applicability of Entry No. 2 of Notification No. 12/2017-Central Tax Rate dated 28.06.2017.

Analysis:

Issue 1:
The applicant intended to purchase a self-sustained unit from a seller engaged in manufacturing ferro alloys and Cold Rolled Formed Sections. The transaction involved transferring all assets and liabilities of the unit to the purchaser for a lump sum consideration. The applicant sought clarification on whether the transaction constituted a supply of goods, services, or both. However, the Authority noted that the questions raised were related to the supply being received by the applicant, not the supply being undertaken by the applicant. As per the definition of advance ruling under the GST Act, the Authority concluded that it could not provide a decision in the form of an advance ruling in this case. The applicant's advocates acknowledged this observation, leading to the rejection of the application under sub-section (2) of section 98 of the GST Act.

Issue 2:
The applicant also inquired about the applicability of Entry No. 2 of Notification No. 12/2017-Central Tax Rate dated 28.06.2017 to the transaction in question. However, since the application was rejected due to the nature of the questions raised, the Authority did not provide a specific ruling on the applicability of the mentioned notification.

In conclusion, the Authority rejected the application for advance ruling as the questions raised were not in relation to the supply of goods or services being undertaken by the applicant. The rejection was based on the provisions of the GST Act, and the applicant's representatives accepted the decision. The Authority clarified the scope of advance rulings and the necessity for questions to be directly related to the applicant's supply activities for a ruling to be provided.