2021 (3) TMI 451 - AAR - GST

Scope of Advance Ruling application - governmental authority Providing drinking water and off-take of sewerage in the Chennai Metropolitan area - pure services or not - N/N. 12/2017 dated 28th June, 2017 - HELD THAT - It is seen that the applicant seeks ruling as to whether the services received by them are Pure Services to avail exemption under Sl.No. 3 of Notification No. 12 /2017-C.T.(Rate) dated 28.06.2017. The admissibility of the application was examined during the hearing extended to them. The applicant stated that they had sought ruling regarding the services received by them for which charges are paid by them, the activity in which they are recipient and not supplier of services. Thus, the question is on the eligibility of a notification in respect of the services received by them and not on the supply made by them. It is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103 (1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant - In the case at hand, the applicant is the recipient of the services and not supplier of such service. Accordingly, this question is not liable for admission and therefore rejected without going into the merits of the case.

Summary

Issues Involved:
1. Whether services provided to a governmental authority by various service providers can be termed as "pure services" to avail exemption under Notification 12/2017 dated 28th June, 2017.

Analysis:
The case involved an application for advance ruling by a governmental authority, seeking clarification on the eligibility of certain services received from service providers to avail exemption under Notification 12/2017. The applicant, Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), submitted the application along with the required fees. The applicant specifically sought clarification on services such as leave way charges, advertisement on social media, security services, license fee for software, third-party inspection, freight charges on transport of water through railways, and printing charges provided to them by various service providers.

The applicant argued that as per Notification No. 12/2017-Central Tax (Rate), services provided to governmental authorities are eligible for exemption under certain conditions. They referred to the definition of "governmental authority" as per the Integrated Goods and Services Tax Act, which includes entities set up by an Act of Parliament or a State Legislature, or established by any Government with specific participation levels to carry out functions entrusted to municipalities. The applicant also cited previous rulings confirming CMWSSB's status as a governmental authority.

During the hearing, the applicant sought a ruling on whether the services received could be considered "pure services" for exemption under the specified notification. However, the Authority noted that the applicant, as a recipient of services, could only seek an advance ruling in relation to supplies made or proposed to be made by them, not for services received. The Authority highlighted the legal provisions that an advance ruling can only be sought regarding supplies of goods or services undertaken or proposed by the applicant, and that the ruling is binding only on the applicant and the concerned officer.

Consequently, the Authority ruled that the application was not admissible under the relevant sections of the CGST Act, TNGST Act, and TNGST Act, as the question raised by the applicant regarding the eligibility of services for exemption did not pertain to supplies made by them. Therefore, the application was rejected without delving into the merits of the case.

In conclusion, the judgment clarified the limitations of seeking advance rulings as a recipient of services and emphasized that such rulings are applicable only to supplies made or proposed by the applicant. The ruling highlighted the importance of aligning the scope of the application with the legal provisions governing advance rulings to ensure admissibility and proper consideration of the case.