2018 (8) TMI 976 - AAR - GST

Application for advance ruling on tax rate for services rejected due to recipient status.

In Re: M/s. Visvesvraya National Institute of Technology, Nagpur

The application for advance ruling regarding the tax rate on pure services received by the institute from service providers was rejected. The Authority ... Rate of tax - Pure services - Whether Rate of Tax on Pure services (excluding works contract service or other composite supplies involving supply of any goods) received by VISVESVARAYA NATIONAL INSTITUTE OF TECHNOLOGY Nagpur from Service Providers is NIL as per Entry No 3 of N/N. 12/2017- Central Tax (Rate) dated 28th June , 2017? Held that:- The applicant is recipient of service and not service providers and also that these services are not under reverse charge mechanism. The notification as referred by them, is applicable to provider of service and not recipient of service. The present applicant being recipient of service and not service provider is not the proper person to make the present advance ruling application - the applicant's application is liable for rejection as per proviso to section 98 (2) of the CGST Act and therefore cannot be entertained by this authority and is accordingly rejected as it is not maintainable. Application dismissed being not maintainable. Issues Involved:1. Determination of the rate of tax on pure services received by an institute from service providers as per Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017.Analysis:Issue 1: Determination of the rate of tax on pure services received by the institute from service providersFacts and Contentions by the Applicant:The applicant, a National Institute of Technology, sought an advance ruling on the tax rate applicable to pure services received from service providers. The institute argued that it qualifies as a governmental authority under the Integrated Goods and Services Tax Act, 2017, due to its establishment by an Act of Parliament. It receives various services such as security, manpower, gardening, and maintenance, and claimed that as a governmental authority, it is exempt from paying GST on these services as per Notification No. 12/2017.Contentions by the Concerned Officer:The jurisdictional Deputy Commissioner of State Tax highlighted the institute's status under the National Institute of Technology Act, 2007, and its inclusion in the schedule of the Act. The officer emphasized the institute's governance structure, funding, and statutory framework under the Act, supporting the contention that the institute is fully funded by the Central Government and granted deemed university status.Observations and Decision:The Authority for Advance Rulings noted that the applicant was a recipient of services and not a service provider, and the services in question did not fall under the reverse charge mechanism. As the notification referred to by the applicant applied to service providers and not recipients, the application for advance ruling was deemed not maintainable. Consequently, the application was rejected under the proviso to section 98(2) of the CGST Act, as the applicant was not the proper person to seek an advance ruling on the matter.Conclusion:The application for advance ruling regarding the tax rate on pure services received by the institute from service providers was rejected on the grounds that the applicant, being a recipient of services, was not eligible to seek such a ruling. The authority held that the applicant's application was not maintainable and therefore could not be entertained.This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by the parties, and the final decision reached by the Authority for Advance Rulings in Maharashtra.