AAR declines ruling on GST applicability for consultancy services to SSNNL and sub-consultant GST rate.

The Authority for Advance Ruling (AAR) declined to provide a decision on the applicability of GST to consultancy services rendered to Sardar Sarovar Narmada Nigam Limited (SSNNL) and the exemption status and applicable GST rate for sub-consultants. The ruling highlighted that the questions were hypothetical and not directly related to the applicant's services, emphasizing that advance rulings are meant to address issues directly impacting the applicant's activities, not third-party transactions. Therefore, no definitive ruling was issued on either query.

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Issues Involved:
1. Applicability of GST on consultancy services rendered to Sardar Sarovar Narmada Nigam Limited (SSNNL).
2. Exemption status and applicable GST rate for sub-consultants if consultancy services are exempted from GST.

Detailed Analysis:

Issue 1: Applicability of GST on Consultancy Services to SSNNL
The applicant, M/s. Poseidon Hydro Infratech, provides consultancy services and has been subcontracted by WAPCOS Ltd. to perform services for SSNNL. The main consultant, WAPCOS, has a clause in its agreement with SSNNL stating, "GST at prevailing rates shall be paid extra by the Client." However, SSNNL has not been paying GST, citing that the consultancy services provided by WAPCOS do not attract GST. The applicant has been paying GST to the government but has not been reimbursed by WAPCOS due to SSNNL's stance.

The applicant sought clarification on whether GST is applicable to consultancy services rendered to SSNNL. The relevant legal provisions under Section 97 of the CGST Act, 2017, which govern the applicability of GST and the conditions for seeking an advance ruling, were examined. The Authority for Advance Ruling (AAR) noted that the question posed by the applicant pertained to third-party transactions (between SSNNL and other consultancy agencies) and not directly to the services provided by the applicant.

Issue 2: Exemption Status and Applicable GST Rate for Sub-Consultants
The second question sought clarity on whether sub-consultants are exempt from GST if the main consultancy services are exempt. The AAR found this question to be hypothetical and speculative, as it was contingent on the resolution of the first issue. Since the first issue was deemed irrelevant to the applicant's direct services, the second question was also considered irrelevant.

Conclusion:
The AAR concluded that it could not provide a decision on either question due to the hypothetical nature of the queries and their irrelevance to the applicant's direct services. The ruling emphasized that the purpose of seeking an advance ruling is to clarify issues directly related to the applicant's activities and not third-party transactions. As a result, no decision was given on the applicability of GST to consultancy services rendered to SSNNL or the exemption status and applicable GST rate for sub-consultants.

Ruling:
1. Question-1: No decision can be given regarding the applicability of GST on consultancy services rendered to SSNNL.
2. Question-2: No decision can be given regarding the exemption status and applicable GST rate for sub-consultants.

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