2024 (9) TMI 1351 - AAR - GST

Levy of GST - pure agent or not - IIT Roorkee - Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers etc. as referred in circular No. 206/18/2023-GST dated 31st October 2023 or not - electricity charges that it recovers from its commercial occupants against the consideration that represents only-reimbursement of actual cost of Electricity charges (on the basis of sub-meter / separate meter) that is being charged by Uttarakhand power corporation limited (UPCL) to the IIT Roorkee - HELD THAT - On considering the first proviso to section 98 (2) of the Act comprehensively, it is apparent that the first proviso covers any proceedings in the case of an applicant under any of the provisions of the Act including Section 65 of the Act, under which Audit under section 65 of the CGST Act, 2017 was conducted by the CGST Audit Commissionerate, Dehradun. It is found that such situation have been covered under sub section (2) of the Section 98 of the Central Goods And Services Tax Act, 2017. The proviso to sub section 2 of the Section 98 of the Central Goods And Services Tax Act, 2017, could be best interpreted that the legislative intent in its wisdom is to empower the advance ruling authority to reject the application in the cases where there is repeated filing of the application before the advance ruling authority on the same issue which is either pending for decision or already decided. It is observed that during the personal hearing, the applicant s representatives were specifically asked about the issue raised in the instant application and the issue raised by the CGST Audit Commissionerate, Dehradun, wherein it was admitted by them that the issue concerning applicability of GST on electricity charges recovered from their commercial occupants viz.-a-viz. pure agent is identical and similar in nature as raised by the Department in their audit proceedings. It was also accepted by them that they had voluntary deposited the entire GST liability along with interest through DRC-03 dated 14.03.2023. The applicant has approached the authority again, for the identical and similar issues and hence we observe that the applicant has approached this authority, on the issue which has already been decided in applicant s own case under the provisions of the Central Goods And Services Tax Act, 2017 and hence in terms of section 98 (2) of the Central Goods And Services Tax Act, 2017, the present application is not admitted and rejected without going into the merits of the case. The subject application for advance ruling made by the applicant is not maintainable and hereby rejected under the provisions of Section 98 (2) of the CGST Act, 2017 and UK GST Act, 2017.

Issues Involved:
1. Whether IIT Roorkee is to be considered as a "Pure agent" for electricity charges it recovers from its commercial occupants.
2. Whether IIT Roorkee falls under the definition of Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers, etc., as referred to in circular No. 206/18/2023-GST dated 31st October 2023.
3. Whether IIT Roorkee is required to charge GST on the amount it recovers from its commercial occupants of campus space on an actual basis.
4. Whether recovery of electricity charges from its tenant is exempted in the case of an educational institute as per the GST Act.
5. Recommendation of SAC code and applicable rate of tax on electricity charges recoverable from tenants if taxable.

Issue-wise Detailed Analysis:

1. Pure Agent Status for Electricity Charges:
The applicant, IIT Roorkee, claimed that it acts as a "pure agent" for electricity charges recovered from its commercial occupants, as it recovers the same amount of units consumed as charged by Uttarakhand Power Corporation Limited (UPCL). The applicant referenced circular No. 206/18/2023-GST dated 31st October 2023, which states that entities acting as pure agents for electricity supply do not include the value of electricity in their supply. However, the Concerned Officer, Smt. Maneesha Saini, pointed out that the issue had already been decided by the CGST Audit Commissionerate, Dehradun, which concluded that IIT Roorkee does not fall under the scope of a "pure agent" for reimbursement of electricity charges.

2. Definition Under Circular No. 206/18/2023-GST:
The applicant sought clarification on whether it falls under the definition of Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers, etc., as referred to in the circular. The ruling did not delve into this issue's merits as the application was rejected on procedural grounds.

3. GST Charge on Recovered Amount:
IIT Roorkee queried whether it is required to charge GST on the amounts recovered from its commercial occupants for electricity consumption. The ruling did not address this issue's merits due to the application's rejection based on procedural grounds.

4. Exemption for Educational Institutes:
The applicant questioned whether the recovery of electricity charges from its tenants is exempted under the GST Act for educational institutes. This issue was not analyzed on its merits due to the procedural rejection of the application.

5. SAC Code and Tax Rate:
IIT Roorkee sought recommendations on the SAC code and applicable tax rate for electricity charges recoverable from tenants if deemed taxable. This issue was not examined due to the rejection of the application on procedural grounds.

Procedural Grounds for Rejection:
The application was rejected under Section 98(2) of the CGST Act, 2017, as the issue had already been decided in the applicant's own case during audit proceedings by the CGST Audit Commissionerate, Dehradun. The applicant had previously accepted the audit observations and voluntarily deposited the entire GST liability along with interest. The ruling emphasized that the Advance Ruling mechanism should not be used for issues already decided or pending in any proceedings under the Act.

Conclusion:
The application for advance ruling by IIT Roorkee was rejected without examining the merits of the case, based on the procedural ground that the issue had already been decided in earlier audit proceedings. The ruling highlighted the legislative intent to prevent repeated filings on the same issue and maintain the integrity of the Advance Ruling mechanism.

Ruling:
The subject application for advance ruling made by the applicant is not maintainable and is hereby rejected under the provisions of Section 98(2) of the CGST Act, 2017, and UK GST Act, 2017.

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