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2023 (6) TMI 1184 - AAR - GSTScope of Advance Ruling application - Transfer of unutilized balance in E-credit ledger on merger of distinct persons within same State having same PAN - transfer of unutilized balance in E-credit ledger between distinct persons from one GSTIN to another GSTIN in some State with same PAN, without following the process of merger - HELD THAT - Any person who is registered under GST or desirous of obtaining a registration under GST may apply for an advance ruling and that the question on which an advance ruling is sought for, may be with respect to any of the issues referred to in Section 97 (2) ibid which are in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In other words, it is the supplier of goods or services or both who can seek an advance ruling on any of the issues specified in clauses (a) to (g) of Section 97(2). In the instant case there is neither any issue involving applicability of a Notification issued under the provision of Act nor this is a case regarding admissibility of input tax credit of tax paid or deemed to have been paid. Here the issue being raised by the applicant is admissibility of transfer of unutilized balance of Input Tax Credit in E-credit ledger and not regarding the admissibility of Input Tax Credit of tax paid - as Section 97 (2) (d) specifies about the admissibility of input tax credit of tax paid and not regarding admissibility of transfer of unutilized balance of Input tax credit lying in E-credit ledger, the issues raised by the applicant in the instant ARA-01 is out of the scope of advance ruling and accordingly their application merits rejection. Application for Advance Ruling on the issue of transfer to unutilized balance of Input tax credit lying in E-credit ledger is not maintainable.
Issues Involved:
1. Transfer of unutilized balance in E-credit ledger on merger of distinct persons within the same State having the same PAN. 2. Transfer of unutilized balance in E-credit ledger between distinct persons within the same State having the same PAN without following the process of merger. Summary: Issue 1: Transfer of Unutilized Balance on Merger The applicant, M/s SBT Textiles Private Limited, sought an advance ruling on whether the unutilized balance of the E-credit ledger could be transferred on the merger of two distinct GSTINs of the same PAN within the State as per Section 18(3) of the CGST Act, 2017. The applicant argued that Section 18(3) allows the transfer of ITC in the event of a merger, and Rule 41 prescribes the manner of such transfer. They contended that since both units are distinct persons under Section 25(4) of the CGST Act, the unutilized balance of ITC should be transferable upon merger. Issue 2: Transfer of Unutilized Balance Without Merger The applicant also sought a ruling on whether the unutilized balance of the E-credit ledger could be transferred between distinct persons (i.e., from one GSTIN to another within the same State and PAN) without undergoing a merger. They argued that Rule 87(14) allows the transfer of the unutilized balance in the E-cash ledger between distinct persons, and similar provisions should apply to the E-credit ledger. Authority's Analysis and Decision: The Authority for Advance Ruling examined the admissibility of the issues under Section 97(2) of the CGST Act, 2017, which outlines the specific issues on which advance rulings can be sought. It clarified that the questions raised by the applicant did not fall under the specified categories, particularly the admissibility of input tax credit of tax paid or deemed to have been paid. The Authority concluded that the issues raised pertained to the transfer of unutilized balance in the E-credit ledger, which is outside the scope of advance ruling as defined under Section 97(2). Order: The application filed by M/s SBT Textiles Pvt. Ltd. for an advance ruling on the transfer of the unutilized balance of Input Tax Credit lying in the E-credit ledger was rejected. The Authority ruled that the issues raised were not maintainable under the scope of "advance ruling" as stipulated under Section 97(2) of the CGST Act, 2017.
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