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2024 (5) TMI 1247 - AAAR - GSTMaintainability of Advance Ruling application - want of deposition of requisite fee as mandated under the GST law - Classification of services - licensing services provided by the Appellant under the Franchise Agreement, for which a periodic royalty is charged - classifiable under Service Code 997336 or under Service Code 997339? - HELD THAT - It transpires that the Appellant was mandated to deposit a total of Rs. 20,000/- as fee (Rs. 10,000/- CGST and Rs. 10,000/- HGST) as a mandatory statutory precondition for filing appeal against the order of the Authority for Advance Ruling, Haryana. However, it is found that vide challan No. 22010600033348 dated 11-01-2022, the Appellant has paid only 3 10,000/- as tax (Rs. 5000/- CGST and Rs. 5000/- as HGST), not the required fee. Since the appeal of the Appellant is incomplete for want of deposition of requisite fee (which is to be deposited in the manner specified in Section 49), the appeal of the Appellant is not admitted. The application of the appellant, being incomplete for want of deposition of requisite fee as mandated under the GST law, deserves to be rejected. Therefore, the appeal filed by M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd.,) Gurugram-122002, Haryana, Is not admitted.
Issues Involved:
1. Classification of services under GST 2. Applicability of GST rates 3. Procedural adherence in appeal filing 4. Validity of AAR's decision-making process Summary of Judgment: 1. Classification of Services under GST: The primary issue was whether the licensing services provided by the Appellant under the Franchise Agreement, for which a periodic royalty is charged, are correctly classifiable under: - Service Code 997336 (licensing services for the right to use trademarks and franchises) or - Service Code 997339 (licensing services for the right to use other intellectual property products), - Or under Service Code 998396 (trademarks and franchises). The Appellate Authority ruled that the services fall under Chapter Heading 9983 as Other Professional, Technical, and Business Services and service code (Tariff)-998396 Trademarks and franchises, attracting GST @ 18%. 2. Applicability of GST Rates: The Appellant argued that the services should be classified under Service Code 997336 or 997339, attracting a GST rate of 12%. The AAR, however, ruled that the services are classifiable under Service Code 998396, attracting a GST rate of 18%. 3. Procedural Adherence in Appeal Filing: The Appellate Authority noted that the pre-requisite of payment of fee for filing the appeal as per Section 100 (3) read with Rule 106 (1) of CGST Act, 2017 was not fulfilled. The Appellant paid only Rs. 10,000/- instead of the required Rs. 20,000/- (Rs. 10,000/- CGST and Rs. 10,000/- HGST). 4. Validity of AAR's Decision-Making Process: The Appellant contended that the AAR's ruling was a non-speaking order, passed without adequate reasons and without considering their submissions. They argued that the ruling violated the principles of natural justice. The Appellate Authority acknowledged these contentions but did not address them substantively due to the procedural lapse in fee payment. Order: The appeal was not admitted due to the incomplete deposition of the requisite fee as mandated under the GST law. The appeal filed by M/s. Subway Systems India Private Limited (Now Eversub India Pvt. Ltd.) was disposed of on these grounds.
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