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2024 (2) TMI 648 - AAR - GSTScope of Advance Ruling - Tax payable as RCM under Notification issued u/s 9(3) of GST Act, 2017 - State Tax due under SGST Act, 2017 or not? - Rajasthan Investment and Promotion Scheme-2019 (RIPS-2019). - HELD THAT - The Authority for Advance Ruling can provide rulings on various matters, including the classification of goods or services, the applicability of a notification issued under the Act, the liability to pay tax on a particular transaction, and the determination of time and value of supply, and the clarification sought by the applicant is not related to the ascertainment or determination of liability to pay tax on any goods or services or both, as no such goods or service is specified in the application. The applicant has sought ruling with reference to the RIPS Scheme-2019. There is no term State Tax due under GST Act, 2017. The applicant, at one hand, is giving relevant facts of RIPS Scheme-2019 and on the other hand, seeks advance ruling under GST Act, 2017 - Since the question raised by the applicant about State Tax due , is related to RIPS Scheme, 2019 of Government of Rajasthan and also of procedural nature, it is not covered in Section 97(2) of GST 2017. Thus the application does not qualify for advance ruling under GST Act, 2017.
Issues Involved:
1. Whether tax payable under Reverse Charge Mechanism (RCM) in terms of Notification issued u/s 9(3) of GST Act, 2017 is considered "State Tax due" under SGST Act, 2017. 2. The applicability of the Rajasthan Investment and Promotion Scheme-2019 (RIPS-2019) in determining "State Tax due and deposited." Issue-wise Detailed Analysis: 1. Reverse Charge Mechanism (RCM) and "State Tax due": The applicant sought an advance ruling on whether the tax payable under RCM, as per the Notification issued under Section 9(3) of the GST Act, 2017, qualifies as "State Tax due" under the SGST Act, 2017. The Reverse Charge Mechanism shifts the tax payment responsibility from the supplier to the recipient of goods or services. Section 9(3) specifies that the tax on certain supplies must be paid by the recipient, and all provisions of the Act apply to the recipient as if they are liable for paying the tax. The authority analyzed the definition of "aggregate turnover" under Section 2(6) of the GST Act, which excludes inward supplies on which tax is payable on a reverse charge basis. It was clarified that the liability under RCM is not the recipient's actual liability but a special arrangement to prevent tax evasion. Therefore, the inward supplies subject to RCM do not form part of the recipient's aggregate turnover, but the value remains part of the supplier's aggregate turnover. 2. RIPS-2019 and "State Tax due and deposited": The applicant's interpretation of "State Tax due and deposited" under RIPS-2019 was also examined. The definition under RIPS-2019 includes the SGST paid through the electronic cash ledger after utilizing input tax credit and VAT/CST due and deposited. The applicant linked the RCM tax to this definition, seeking inclusion under "State Tax due." However, the authority noted that the term "State Tax due" is specific to the RIPS-2019 scheme and not defined under the GST Act, 2017. The applicant's question was related to procedural aspects of the RIPS-2019 scheme and not covered under Section 97(2) of the GST Act, which outlines matters eligible for an advance ruling, such as classification, applicability of notifications, and determination of tax liability. Conclusion: The authority concluded that the application for an advance ruling is not maintainable under Section 97(2) of the GST Act, 2017, as the question raised pertains to procedural aspects of the RIPS-2019 scheme rather than the determination of tax liability under the GST Act. Consequently, the application was rejected under Section 98 of the GST Act, 2017. The ruling is valid unless declared void under Section 104(1) of the GST Act.
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