CENTRAL AUTHORITY FOR ADVANCE RULING?

[Mr. M. GOVINDARAJAN]

Advance Ruling

The Central Goods and Services Tax Act, 2017 (‘Act’) provides for getting advance ruling the subject of which is dealt in chapter XVII of the Act.  The expression ‘advance ruling’ is defined under section 95(a) of the Act as a decision provided by the Authority or the Appellate Authority or the National Appellate Authority.

Authority for Advance Ruling

Section 96 provides that subject to the provisions of Chapter XVII, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory.   As such there is no separate Authority for Advance Ruling constituted by the Central Government under the Act.  The State Authority for Advance Ruling shall be deemed to be the Central Authority in respect of that State.

Rule 103 provides that the Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.  Rule 103 of the State GST Rules provides that the Central Government and the State Government shall appoint officer in the rank of Joint Commissioner as member of the Authority for Advance Ruling.

Appellate Authority for Advance Ruling

Section 99 of the Act provides that subject to the provisions of this Chapter, for the purposes of this Act, the Appellate Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate Authority in respect of that State or Union territory.   As such there is no separate Appellate Authority for Advance Ruling constituted by the Central Government under the Act.  The State Appellate Authority for Advance Ruling shall be deemed to be the Central Appellate Authority in respect of that State.

The Appellate Authority of each State is having Commissioner of Central Tax as one Member and Commissioner of State Tax as another Member.

National Appellate Authority for Advance Ruling

Section 101A of the Act provides that the Government shall, on the recommendations of the Council, by notification, constitute, with effect from such date as may be specified therein, an Authority known as the National Appellate Authority for Advance Ruling for hearing appeals made under section 101B to decide the conflicts Advance Rulings given by the Appellate Authorities of two or more States or Union Territories.

Advance Ruling Authorities under IGST Act

Section 20 (xviii) of the IGST Act provides that subject to the provisions of this Act and the rules made there under, the provisions of Central Goods and Services Tax Act relating to Advance Ruling shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act.

Therefore the matters relating to the provisions of integrated tax shall also be dealt with by the Authority for Advance Ruling of the respective State and also by the Appellate Authority of respective State.  The integrated tax is levied on the inter-State supply i.e., the transaction taken place between two or more States.

Some decisions of Authorities for Advance Rulings

In re ‘Hindalco Industries Limited’ – 2018(10) TMI 304 – ARA, Uttar Pradesh, the Authority held that as the registered persons are outside the territorial limits of State of Uttar Pradesh, the present application is outside the scope of Jurisdiction. The Authority for Advance Ruling held that the present Advance Ruling application is dismissed as not maintainable.

In re ‘T and D Electricals’ – 2020 (1) TMI 659 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN, the applicant is registered under GST as works contractor and wholesale supplier in Jaipur, Rajasthan having GST No. 08AADFT8381Q1Z9.  The applicant has been awarded a contract by Shree cement Ltd., at Karnataka.  The applicant sought for a ruling as to whether he is to obtain a separate registration in Karnataka or he has to pay IGST as it is inter-State supply.   The Authority held that the authority for Advance Ruling is created under SGST/UTSGST Act and thus ruling pronounced are applicable within the particular state only, it is for this reason that questions relating to requirement of GST registration in another state is beyond the jurisdiction.

There is no solution in which the Authority for Advance Ruling will decide this issue.

In re ‘K.M. Trans Logistics Private Limited’ – 2019 (2) TMI 919 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN  the applicant is providing transport services to various manufacturers of motor vehicles for carrying their vehicles from the factory to the various cities in India where the authorized dealers are located. The applicant in all communications has indicated that the registered office of the company is at Jaipur.  The billing, maintenance of account and operational control of the work is done from the Jaipur office.  The applicant sought for advance ruling on the following questions-

1. What should be the place of business to be considered for the purpose of registration?
2. Since no billing is done from any other State other than Jaipur and even input services are billed at Jaipur thus the applicant is required to take registration at Jaipur only or at any other State?
3. Whether having vacant lands on lease for parking of trailers/trucks at various cities for operational purpose requires registration at various cities when billing, control, registered office, head office and management is centralized located at Jaipur.

The Authority for Advance Ruling held that all operational control relating to transport is done from the registered office in Jaipur where all accounts are maintained, thus making it ‘place of business’ for the applicant from where the applicant is making supply outside state.  The applicant has rightly taken registration in Rajasthan as location of supplier as well as place of supply is Jaipur only.  As regards ruling on registration for having leased vacant plot in another State, the said issue is outside the purview of the Authority for Advance Ruling in Rajasthan  as Authority for Advance Ruling of a State have jurisdiction in that State only.

In such a case the Authority for Advance Ruling as the representative of the Central Act it shall decide the issue raised by the applicant.

In re ‘Parker Hannifin India Private Limited’ – 2020 (1) TMI 793 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA the Appellate Authority for Advance Ruling held that the Adjudicating Authority for Advance Ruling is constituted for respective State/Union territory and not a Central Authority.  Hence the ruling is applicable only within territorial jurisdiction of concerned State or Union territory.  Further such ruling is applicant specific.  It is not applicable to similarly placed other taxable person even under the same territorial jurisdiction.

In the above ruling the Appellate Authority for Advance Ruling itself said that it is not a Central Authority.  Because of this the Advance Rulings in respect of integrated tax is very less which requires more clarifications in their transactions.

Whether the above said decision is correct?  Whether the Authorities for Advance Ruling will not entertain Central tax matters; if so whether a separate Authority for Central Tax is to be constituted? 

Views of the experts are solicited.