2022 (11) TMI 258 - AAR - GST

Maintainability of advance ruling application - application filed by the recipient of service - Classification of supply - build, design, operate and transfer bulk supply, distribution systems of the existing water supply systems in Belagavi City, Karnataka - reimbursement of manpower service provided as a part of Operation and Maintenance in relation to works contract service to build, design, operate and transfer bulk supply, distribution systems of the existing water supply systems in Belagavi City, Karnataka - pure services provided to KUIDFC in relation to works contract service to build, design, operate and transfer bulk supply, distribution systems of the existing water supply systems in Belagavi City, Karnataka - applicability of Sl.No.3 of Notification No.11/ 2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No.22/2021 dated 31.12.2021. Whether the applicant, is the proper person to file the instant application or not, being the recipient of the impugned services to which the questions are related? HELD THAT - Section 95(a) of the CGST Act 2017, while defining the term 'advance ruling', stipulates that an applicant can seek advance ruling on the questions specified under Section 97(2) of the CGST Act 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said 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 said applicant, but in relation to the service/s being received by them. Therefore the instant application is beyond the jurisdiction of this authority and hence is liable for rejection. The application filed by the Applicant for advance ruling is rejected, in terms of Section 98(2) of the CGST Act 2017.

Summary

Issues:
1. Jurisdiction of the advance ruling authority regarding questions related to services received by the applicant.

Analysis:
The case involved an application for advance ruling filed by a government entity, seeking clarification on certain GST-related questions. The applicant, a nodal agency for implementing government schemes, received funds from the government for urban infrastructure projects. The applicant provided various services, including project monitoring and occasional taxable services. The applicant also received services such as legal services and project monitoring from professionals. One of the key issues raised in the application was related to works contract services for water supply systems in a city, seeking clarification on the applicability of specific notifications. During the personal hearing, the applicant's representative reiterated the facts presented in the application.

The advance ruling authority, comprising Dr. M. P. Ravi Prasad and Sri. T. Kiran Reddy, noted that the CGST Act and the KGST Act have similar provisions and differ only on specific matters. The authority considered the submissions made by the applicant and the issues raised for advance ruling. However, the authority observed that the questions raised in the application were related to services received by the applicant, not services provided by them. As per Section 95(a) of the CGST Act 2017, an applicant can seek advance ruling on questions related to goods or services being undertaken or proposed by them. Since the questions in this case were about services received, the authority concluded that the application fell beyond its jurisdiction and was liable for rejection.

In light of the above analysis, the advance ruling authority rejected the application filed by the applicant under Section 98(2) of the CGST Act 2017. The ruling emphasized that the questions raised were not directly related to goods or services being undertaken by the applicant, leading to the rejection of the application.