2018 (9) TMI 692 - AAR - GST

GST Advance Ruling Denied: Jurisdictional Limits Prevent Substantive Tax Assessment for Engineering Consultancy Service Project

In Re: Fichtner Consulting Engineers (I) Pvt Ltd.

Engineering consultancy firm sought Advance Ruling on GST applicability for an inter-state service project. The AAR rejected the application, determining ... Maintainability of Advance Ruling Application - Supply of services - place of supply - Applicant are an Engineering consultancy organization, providing Engineering Services, mainly Design and Drawings to power and other projects, operating from Chennai and Bengaluru - whether CGST & SGST or IGST is payable on the said supply. i.e., whether the transaction is an inter-state supply or intra-state supply? Held that:- Section 97 of the CGST Act and Tamil Nadu GST Act (TNGST) has given the scope of Advance Ruling Authority, i.e, the question on which the Advance Ruling can be sought - apart from list provided in Section 97(2), no other issue can be decided by the Advance Ruling Authority and therefore the Acts limit the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2) - The Application is therefore rejected without going into the merits of the case, on the issue of lack of jurisdiction. The Application for Advance Ruling dated 06.02.2018 of M/s. Fichtner Consulting Engineers (India) Private Limited is rejected, under sub-section (2) of section 98 of the CGST Act, 2017 and the TNGST Act, 2017. Issues involved:1. Determination of the place of supply for GST purposes in a transaction involving engineering consultancy services.2. Whether the transaction is an inter-state supply or intra-state supply.3. Jurisdiction of the Advance Ruling Authority to decide on specific issues under Section 97(2) of the CGST Act and Tamil Nadu GST Act.Analysis:1. The applicant, an engineering consultancy organization, sought an Advance Ruling on whether to charge IGST or SGST/CGST for a transaction related to providing engineering services for a coal handling plant project in Jharkhand. The applicant argued that as the service was in relation to an immovable property in Jharkhand, the place of supply under Section 12(3) would be Jharkhand, making it an inter-state supply. The applicant had received an order from a client in Chennai, and the drawings were delivered to the client's office in Chennai. The applicant's scope of supply ended with the client, and they did not have direct interaction with other parties involved in the project. The SAC assigned for the transaction was 998333 - Engineering Services for Industrial and Manufacturing Projects.2. The main issue was to determine whether the transaction constituted an inter-state supply or an intra-state supply for GST purposes. The Advance Ruling Authority referenced Section 97 of the CGST Act and Tamil Nadu GST Act, which outlined the scope of questions for which an Advance Ruling could be sought. The Authority noted that the Acts limited the Advance Ruling Authority to decide only on the issues specified under Section 97(2), such as classification of goods or services, determination of tax liability, and registration requirements. As the issue of determining the place of supply did not fall within the specified scope, the application was rejected based on lack of jurisdiction without delving into the merits of the case.3. In conclusion, the Advance Ruling Authority rejected the application of the engineering consultancy organization under sub-section (2) of section 98 of the CGST Act, 2017, and the Tamil Nadu GST Act, 2017, citing lack of jurisdiction to decide on issues beyond those earmarked under Section 97(2). The Authority clarified that unless a mention was specifically made to dissimilar provisions, a reference to the Central Goods and Service Tax Act would also apply to the same provisions under the Tamil Nadu Goods and Service Tax Act.