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TMI Blog2020 (11) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... /2019-20/B-31, dated 12.03.2020., pronounced by the Maharashtra Authority, for Advance Ruling (hereinafter referred to as MAAR) BRIEF FACTS OF THE CASE 3.1 M/s. Portescap India Pvt. Ltd., having GSTIN 27AAACK4896K1ZZ, is engaged in the activity of manufacturing of customized motors in India. The Appellant is an SEZ Unit and engaged in exports of the manufactured goods outside India. 3.2 The Appellant procures Rental Services from Santacruz Electronic Export Processing Zone (SEEPZ), Special Economic Zone (SEZ) Authority, situated at SEEPZ Service Centre Building, Andheri East, Mumbai-400096 having GSTIN 27AAALS4995G1ZH. 3.3 In accordance with the Notification No. 18/2017 - Integrated Tax (Rate) dated 05.07.2017, the Central Government exempts services imported by a unit or a developer in the Special Economic Zone for authorized operations, from the whole of the integrated tax leviable thereon, under Section 5 of the IGST Act, 2017. 3.4 The issue in the present case is whether tax is payable under reverse charge mechanism (RCM) on procurement of domestic services like "renting of immovable property services" from SEEPZ SEZ, in accordance with Notification No. 13/2017-Central Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance Ruling Authority (MAAR) to obtain a ruling with regard to the questions, mentioned below: (i) Whether Appellant is required to pay tax under reverse charge mechanism on procurement of renting of immovable property services from the SEEPZ Special Economic Zone Authority in accordance with Notification No. 13/2017- C.T.(Rate), dated 28.06.2017 read with Notification No. 03/2018 - Central Tax (Rate), dated 25.01.2018? (ii) Whether Appellant is required to pay tax under reverse charge mechanism on any other services, in accordance with Notification No. 13/2017, dated 28.06.2017 read with Notification No. 03/2018 - Central Tax (Rate), dated 25.01.2018? (iii) If, answers to the above questions are in the affirmative, then the tax under reverse charge mechanism is required to be paid under which tax head i.e., IGST or CGST and SGST? 3.9 The Maharashtra AAR vide their Ruling No. GST-ARA-93/2019-20/13-31, dated 12.03.2020, held that the Advance Ruling application filed by the Appellant for obtaining Advance Ruling in respect of the issues mentioned therein is not maintainable, thereby rejecting the aforesaid application. The Maharashtra AAR based their ruling on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units/developers:- "6. When a SEZ unit or SEZ developer procures any goods or services from an unregistered supplier, whether the SEZ unit or SEZ developer needs to pay IGST under reverse charge or these will he zero rated supplies? Supplies to SEZ unit or SEZ developer have been accorded the status of inter-State supplies under the IGST Act. Under the GST Law, any supplier making inter-State supplies has to compulsorily get registered under GST. Thus, anyone making a supply to a SEZ unit or SEZ developer has to necessarily obtain GST registration." Thus, a supply to SEZ will be considered as an inter-state supply and as long as the same supply is used for authorized operations of the SEZ, the same will be zero-rated in terms of Section 16 of the IGST Act, 2017; 5.5 That the Default List of Services approved by the Department of Commerce (F. No. D.12/19/2013-SEZ, dated 02.01.2018) for authorized operations specifically includes "Renting of Immovable Property" within its ambit. Therefore, it is being submitted that there can be no liability on the SEZ unit, since the service received by the SEZ unit would be considered as a zero-rated service in terms of Section 16 of the IGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 3. Karnataka AAR KAR ADRG 66/2019, dated 21-09-2019 JSW Steel Ltd 4. Odisha AAAR 03/0DISHA-AAAR/2019-20, dated 05-11-2019 Penguin Trading and Agencies Limited RESPONDENT's /DEPARTMENT's SUBMISSIONS 6. The submissions made by the Jurisdictional Officer/Respondent are as under: 6.1 that the Advance Ruling passed by the MAAR is perfectly legal and correct in as much as the Advance Ruling application filed by the Appellant has rightly been rejected by the MAAR in terms of Section 95(a) of the CGST Act, 2017, after observing that the issue/question in respect of which the Advance Ruling was sought for by the Appellant was not pertaining to the supply, undertaken or proposed to be undertaken by the Appellant, as the Appellant is not the supplier of the impugned service, i.e., "Renting of immovable property service" but the recipient of the said services; that the said service of the "Renting of immovable property- is supplied by the SEEPZ SEZ Authority; 6.2 As regards the contention, put forth by the Appellant, in as much as the Section 97(2) of the CGST Act, 2017 provides for the Advance Ruling on the issue of the admissibility of the Input Tax Credit of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation filed by M/s. Naga Limited, wherein it has been held that the applicant is the recipient of the services and not supplier of such service. accordingly the application is not liable for admission. PERSONAL HEARING 7. A hearing in the matter was held in the virtual mode via video conferencing on 15.10.2020, which was attended by Shri Thirumalai, Advocate as a representative of the Appellant, and by Ms. Rhea Joshi, Assistant Commissioner (Central Tax), as the Jurisdictional officer/Respondent, in the subject appeal matter. 7.1 During the course of the said hearing, Shri Thirumalai referred to the Hon'ble Kerala High Court Judgment, dated 03.02.2020 in the case of Sutherland Mortgage Services Inc. Vs. Principal Commissioner of Customs, Central GST and Central Excise, Kochi, wherein the Hon'ble High Court has inter-alia observed that the provision as per clause (e) of sub-section (2) of Section 97 of the CGST Act, 2017 is in wide terms and consequently held that the issues like the "Place of Supply". which is not expressly enumerated under sub-section (2) of Section 97 of the CGST Act, 2017, but the determination of which is crucial for the determining the liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. It has been observed by the MAAR that in the subject case. the Appellant is not undertaking the impugned supply, rather they are the recipient of the impugned supply, i.e., "Renting of immovable property services", and therefore, the impugned transaction, i.e. services of Renting of immovable property, is not in relation to the supply of goods or services or both, undertaken or proposed to be undertaken by the Appellant, and thereby has rejected the Advance Ruling application filed by the Appellant in terms of the provision of Section 95(a) of the CGST Act, 2017. 9. Having gone through the above appeal memorandum, and the rulings of the Maharashtra Advance Ruling Authority (MAAR) on the question raised by the Appellant, the only moot issue before us is whether the Advance Ruling application filed by the Appellant is maintainable in terms of Section 95 (a) read with Section 97(2) of the CGST Act, 2017 or not. Thus. we are going to restrict our discussions within the periphery of the aforesaid issue, i.e. the maintainability of the subject Advance Ruling applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich shall he paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall be apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 13. Section 9 of the CGST Act, 2017 is the section dealing with 'levy and collection'. It provides for the levy of CGST on all intra-state supplies of goods or services or both. Section 9(3) of the CGST Act, 2017 in keeping with the tenor of the Section also speaks about the 'liability to pay tax'. Under this sub-section, the Government specifies the categories of 'supply of goods or services' or both, the tax on which shall be paid on reverse charge basis. Further the words occurring in the Section - 'and all provisions of this Act shall apply to such recipient as if he is the person liable to pay tax in relation to such supply of goods or services or both' are important. This section determines the category of recipients who are liable to pay tax. Though the recipient is not a supplier, as per the deeming fiction in the section, if he is covered by the notification issued under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court in the aforesaid case went on to hold that even the question related to the "place of supply", which has not been expressly mentioned under sub-section (2) of Section 97 of the CGST Act, 2017, would come under the jurisdiction of the Advance Ruling for the purpose of deciding the issue pertaining to the determination of the liability to pay tax on any goods or services or both, as enumerated under clause (e) of the Section 97 (2) of the CGST Act, 2017. Thus, it is evident from the aforesaid High Court Judgment that the clause (e) of Section 97(2) of the CGST Act, 2017 has got a very wide connotation and would cover all sorts of transactions, where the Advance Ruling on the questions related to the determination of the liability to pay tax including the liability under RCM (Reverse Charge Mechanism) can be sought by the Applicant in terms of the provisions related to the Advance Ruling as provided under Chapter XVII of the CGST Act, 2017. 15. Hence, in view of the above discussion, we are of the view that the Appellant is eligible to file the subject Advance Ruling application, wherein they have sought the Advance Ruling as to whether they are liable to pay tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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