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2021 (7) TMI 479 - AAR - GSTScope of Advance ruling application - Eligibility for deduction of TDS - suppliers of spare parts of agricultural machinery to Kerala Agro Machinery Corporation Ltd (KAMCO) - Relevant time for deduction of TDS - exemption from TDS if the particulars of refundable excess difference between our input tax and output tax are submitted in prior - mechanism for filing an application or formal request and get the excess tax refund payable to them be transferred to the TDS account - refund of the excess TDS in the same month of the supply, can be availed or not - supply of goods or supply of service? HELD THAT - On a plain reading of the provisions of Section 51 of the CGST Act, it is evident that Section 51 of the CGST Act applies to prescribed and notified categories of persons receiving supplies of goods and / or services exceeding specified value and making payment to the supplier for the same and not to any supplier of goods and / or services. Admittedly, the applicant has preferred this application as a supplier of goods / services - the issues regarding applicability of Section 51 of the CGST Act are not in respect of any matter specified in Section 97 (2) of the CGST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence this authority has no jurisdiction to issue ruling on the above questions. Further the issues regarding exemption from TDS deduction, mechanism for application or formal request and claim of refund of excess deducted TDS are also not in respect of any matter that is specified in Section 97 (2) of the CGST Act in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant and accordingly this authority has no jurisdiction to issue any ruling on the questions. This authority has no jurisdiction to answer the questions.
Issues:
1. Applicability of TDS under Section 51 of the CGST Act to Kerala Agro Machinery Corporation Ltd. 2. Exemption from TDS deduction based on input tax and output tax difference. 3. Mechanism for direct transfer of excess tax refund to TDS account. 4. Claiming and receiving refund of excess TDS in the same month. 5. Nature of supply of spare parts as goods or services under Section 51. Analysis: Issue 1: Applicability of TDS to Kerala Agro Machinery Corporation Ltd. The applicant sought clarification on whether Kerala Agro Machinery Corporation Ltd. (KAMCO) falls under entities eligible to deduct TDS under Section 51 of the CGST Act. The contention was that TDS deduction by awarders should be based on the supplier's excess input tax available with the department, especially in cases where input tax exceeds output tax due to the nature of business activities. The Jurisdictional Officer argued that the questions raised did not fall within the scope of Section 97(2) of the CGST Act as they pertained to specific provisions for refunds for inverted tax structure, not TDS applicability. Issue 2: Exemption from TDS based on tax difference The applicant highlighted the burden of TDS payment on working capital due to higher input tax compared to output tax. They proposed that TDS deduction should be linked to the supplier's excess input tax available with the department to avoid additional financial strain. The Authority concluded that the questions raised did not align with matters specified under Section 97(2) of the CGST Act, indicating a lack of jurisdiction to rule on such queries. Issue 3: Mechanism for direct transfer of excess tax refund The applicant inquired about a mechanism to transfer excess tax refund directly to the TDS account to avoid upfront payment. They suggested streamlining the process for businesses with higher input tax than output tax. However, the Authority reiterated that the questions raised did not fall under the purview of matters specified for advance ruling under the CGST Act. Issue 4: Claiming refund of excess TDS in the same month The applicant questioned the process of claiming and receiving a refund of excess TDS in the same month of supply using the Refund Application Form under CGST Rules. The Authority reiterated that the questions raised did not meet the criteria specified in Section 97(2) of the CGST Act for seeking an advance ruling. Issue 5: Nature of supply of spare parts under Section 51 The applicant sought clarification on whether the supply of spare parts constitutes a supply of goods or services and if it attracts Section 51 of the CGST Act. The Authority concluded that the questions raised did not relate to matters specified under Section 97(2) of the CGST Act, indicating a lack of jurisdiction to provide a ruling on the nature of the supply. In conclusion, the Authority ruled that the questions raised did not align with matters specified under Section 97(2) of the CGST Act, thereby lacking jurisdiction to provide rulings on the issues raised by the applicant.
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