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2022 (3) TMI 678 - AAR - GSTMaintainability of Advance Ruling application - Territorial Jurisdiction - Input tax credit - applicant M/s. Granules USA Inc. is a manufacturer of bulk drugs and wholly owned subsidiary of Granules India Limited - M/s. Granules USA Inc. supplied pharmaceutical tablets to M/s. Lambda Therapeutic Research Ltd. from USA on behalf of Granules India Limited. - recipient of the goods M/s. Lambda Therapeutic Research Ltd is eligible to take credit of the IGST or not? - HELD THAT - It is to inform that Section 96 of the CGST SGST Acts clearly state territorial nexus of an Advance Ruling authority so that an authority for Advance Ruling shall function as such an Authority for Advance ruling for that State or Union Territory in which it is constituted under the CGST SGST Acts. Evidently the applicant seeks clarification regarding the question impacting taxable person who is not a registered taxable person in the State of Telangana. Therefore an Advance Ruling cannot be made for a person not registered in the State of Telangana in light of this provision. Further Clause (a) of Section 95 of CGST Act 2017 clearly states that Advance Ruling means a decision provided by the authority to the applicant on questions in relation to the supply of goods or services or both being undertaken by such applicant . Here a clarification is sought on a question unrelated to supply of goods or services made by the applicant. Therefore even on this count an Advance Ruling can t be made in the present case. The application is rejected.
Issues Involved:
1. Jurisdiction of the Advance Ruling Authority. 2. Eligibility of Input Tax Credit (ITC) for the recipient. Jurisdiction of the Advance Ruling Authority: The case involved an application filed by M/s. Granules USA Inc., a subsidiary of Granules India Limited, seeking clarification on the eligibility of Lambda Therapeutic Research Ltd. to avail Input Tax Credit (ITC) paid by World Courier. The Authority noted that Section 96 of the CGST and SGST Acts establish the territorial nexus of an Advance Ruling authority, specifying that it shall function as such for the state or union territory in which it is constituted. As the question raised by the applicant pertained to a taxable person not registered in Telangana, the Authority concluded that an Advance Ruling cannot be provided for such a person based on this provision. Eligibility of Input Tax Credit (ITC) for the recipient: The applicant argued that Lambda Therapeutic Research Ltd., as the recipient of the goods, should be eligible to claim the IGST paid by World Courier and pass on the credit to Granules India Limited, the ultimate recipient. However, the Authority pointed out that Section 95(a) of the CGST Act defines Advance Ruling as a decision provided on questions "in relation to the supply of goods or services" undertaken by the applicant. Since the query raised was not directly related to the supply of goods or services by the applicant, the Authority concluded that an Advance Ruling could not be issued in this case. In consideration of the statutory provisions and the reasons discussed, the Authority rejected the application for Advance Ruling submitted by M/s. Granules USA Inc. The decision was based on the lack of jurisdiction due to the applicant's registration status and the nature of the query raised, which did not directly concern the supply of goods or services by the applicant.
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