AAAR Maharashtra sets aside advance ruling on manpower services export classification citing jurisdictional limits under Section 97(2)

The AAAR Maharashtra condoned a 26-day delay in filing an appeal by the jurisdictional officer, attributing it to teething problems in GST implementation. The appeal challenged an advance ruling that classified manpower services to overseas clients as zero-rated export of services. The AAAR held that the questions regarding export classification and zero-rated supply determination were beyond the scope and jurisdiction of advance ruling provisions under Section 97(2) of CGST Act 2017. The Authority ruled that no advance ruling should have been passed on these matters, as they fell outside the permissible scope of advance ruling applications.

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Issues Involved:
1. Whether the transaction in question was a zero-rated supply or a normal supply under the GST Act.
2. If the said supply was zero-rated, whether the same could be considered as an export of service under GST Act.
3. Jurisdiction of the Advance Ruling Authority to determine the place of supply.

Detailed Analysis:

1. Nature of Supply: Zero-Rated or Normal Supply
- The respondent, engaged in providing manpower services to technical industries, proposed to enter into a service agreement with NES Abu Dhabi, a subsidiary of the same parent company, NES Global Ltd, UK.
- The Advance Ruling Authority (ARA) initially held that the transaction was a zero-rated supply and classified it as an export of service under the GST Act.
- The appellant argued that the ARA's decision was based solely on the draft Master Service Agreement (MSA) and not the final agreement, questioning the completeness of the provided documentation.

2. Export of Service Classification
- The appellant contended that the ARA failed to appreciate the need for detailed information on the end-to-end transactions to determine the true nature of the services provided.
- The respondent maintained that the services were provided on their own account, thus qualifying as an export of service and not as intermediary services.
- The respondent referenced Circular No. 107/26/2019-GST, which supports their stance that services provided on one's own account do not fall under the intermediary category.

3. Jurisdiction of the Advance Ruling Authority
- The appellant argued that the ARA exceeded its jurisdiction by addressing questions not specified under Section 97(2) of the CGST Act, 2017, such as determining the place of supply.
- The appellate authority agreed, stating that questions involving the determination of the place of supply are beyond the scope of the Advance Ruling Authority.
- Section 97(2) explicitly lists the questions eligible for advance ruling, which do not include the determination of the place of supply.

Condonation of Delay:
- The appellant filed a miscellaneous application for condonation of a 26-day delay in filing the appeal, attributing it to initial teething problems post-GST implementation.
- The appellate authority condoned the delay, allowing the appeal to proceed.

Final Decision:
- The appellate authority set aside the ARA's ruling, concluding that the ARA lacked jurisdiction to decide on the questions posed by the respondent.
- The order emphasized that the questions raised were beyond the scope of Section 97(2) of the CGST Act, 2017, and thus, no advance ruling could be passed on those grounds.

Order:
- The appellate authority held that since the questions asked by the appellant were not covered under the scope and jurisdiction of the Advance Ruling, no advance ruling could be passed.

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