2021 (1) TMI 588 - AAR - GST

Scope of Advance Ruling application - Classification of services - composite supply or mixed supply? - services for a Single consolidated Rate as a package - services are not naturally bundled and are capable of being provided independently - Section 2(74) of the CGST Act 2017 - rate of GST - Applicable HSN Code - Input tax credit - refund of GST paid on outward supply invoices - HELD THAT - The provisions for seeking Advance Ruling made under the Act is limited to the activities conducted by the applicant only and is for the purpose of clarifying issues such as classification of the supply of goods/services provided by them their GST liability if any applicability of a notification issued under the provisions of the Act determination of time and value of supply of goods or services or both admissibility of input tax credit determination of the liability to pay tax on any goods or services or both whether applicant is required to be registered or whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both within the meaning of that term. The very purpose of the Board for making the provision of Advance Ruling in the CGST Act 2017 is to help the applicant in planning his activities which are liable for payment of GST. It also brings certainty in determining the tax liability as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities. Further it helps in avoiding long drawn and expensive litigation at a later date. Seeking an advance ruling is inexpensive and the procedure is simple and expeditious. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. In the present case the applicant has asked hypothetical questions seeking Advance Ruling on an issue which has not materialised till date. We find that a period of nearly one year has lapsed after the filing of the application of Advance Ruling by the applicant (which was filed on 13.10.2019) but the agreement which they were supposed to make with the so-called Rice exporter has not materialised so far i.e. no agreement has been signed in this regard and therefore no copy has been submitted in the instant case. Without any agreement or any other relevant documents having been provided by the applicant in the instant case it would not be possible to give a decision in the said matter.

Summary

Issues Involved:
1. Classification of services as "Mixed supply" or "Composite supply".
2. Applicable HSN code and GST rate for the bundled services.
3. Eligibility to avail Input Tax Credit (ITC).
4. Exporter client's eligibility to claim a refund of GST paid on outward supply invoices.

Detailed Analysis:

Issue 1: Classification of Services as "Mixed supply" or "Composite supply"
The applicant sought clarification on whether their bundled services provided at a single consolidated rate would be considered a "Mixed supply" under Section 2(74) of the CGST Act, 2017, or a "Composite supply". The applicant argued that the services are not naturally bundled and can be provided independently, thus qualifying as a "Mixed supply". The authority noted that the applicant's scenario is hypothetical as no agreement has materialized, and therefore, no decision could be made without relevant documents.

Issue 2: Applicable HSN Code and GST Rate
The applicant inquired about the applicable HSN code and corresponding GST rate for the bundled services, where the highest rate of service in the bundle is 18%. The authority reiterated that without the submission of an agreement or relevant documents, it is not possible to determine the applicable HSN code and GST rate.

Issue 3: Eligibility to Avail Input Tax Credit (ITC)
The applicant sought to know if they could avail ITC on GST paid for commercial vehicles, repair and maintenance costs, and inward supplies related to the packaged outward supply. The authority again stated that without the submission of relevant documents, no decision could be made on the eligibility to avail ITC.

Issue 4: Exporter Client's Eligibility to Claim Refund of GST
The applicant asked whether their exporter client would be eligible to claim a refund of the GST paid on their outward supply invoices. The authority concluded that without an agreement or relevant documents, it is not possible to determine the eligibility for a GST refund.

Conclusion:
The authority ruled that due to the non-submission of copies of the agreement or any other relevant documents, no decision could be taken on any of the issues raised by the applicant. The questions posed were hypothetical, and the lack of materialized agreements made it impossible for the authority to provide a ruling.