2021 (3) TMI 567 - AAR - GST

Water pump classification request rejected for non-compliance with GST rules

The Authority for Advance Ruling, Gujarat, rejected the applicant's request for classification of water pumps under GST due to non-compliance with ... Advance ruling application maintainability - prescribed form requirement under Section 97 and Rule 104 - fee requirement for advance ruling under CGST and GGST - rejection under Section 98(2)Advance ruling application maintainability - prescribed form requirement under Section 97 and Rule 104 - fee requirement for advance ruling under CGST and GGST - rejection under Section 98(2) - Whether the applicant's advance ruling application is maintainable in view of non-compliance with the prescribed form and fee requirements. - HELD THAT: - The Authority found that the application was not submitted in the prescribed FORM GST ARA-01 and that the applicant had deposited only Rs. 5,000. A combined reading of Section 97 and Rule 104 of the CGST and GGST framework requires filing in FORM GST ARA-01 and payment of fee of Rs. 5,000 under each Act, i.e., a total of Rs. 10,000. Non-compliance with the mandatory form and fee requirements renders the application invalid for adjudication on the merits. Given this statutory non-compliance, the Authority declined to examine the substantive classification question and proceeded to reject the application as non-maintainable under the provision authorising rejection for failure to comply with filing requirements. [Paras 6, 7, 8, 9, 10]Application rejected as non-maintainable under Section 98(2) for failure to file FORM GST ARA-01 and for non-payment of the required fee of Rs. 10,000 (Rs. 5,000 under each of CGST and GGST).Final Conclusion: The application of M/s. Mohitkumar Mahendrabhai Patel (C/O Aster Industries) is rejected under Section 98(2) of the CGST/GGST Act, 2017 as non-maintainable for failure to comply with the mandatory form and fee requirements; the substantive classification question was not decided. Issues:Classification of water pump under HSN 8413 or HSN 8421 for GST purposes.Analysis:The applicant, engaged in manufacturing and trading water pumps, sought an Advance Ruling on the classification of their product under GST. The applicant argued that their water pumps, specifically RO booster pumps, are essential for increasing water pressure in reverse osmosis systems, ensuring efficiency and high-quality water production. They highlighted the importance of proper water pressure for RO systems to function effectively and the necessity of booster pumps in cases of low pressure. The applicant emphasized the benefits of using RO booster pumps, such as improved system efficiency, water quality, and reduced wastage. They also mentioned their previous tax compliance under the Gujarat VAT Act and sought clarity on the classification under GST.The Authority for Advance Ruling, Gujarat, observed that the applicant failed to submit the application in the prescribed format as required by Section 97(1) of the CGST Act, 2017, and Rule 104 of the CGST Rules, 2017. Additionally, the applicant only paid a fee of Rs. 5,000 instead of the required Rs. 10,000. The Authority noted the specific requirements for submitting an Advance Ruling application, including the use of FORM GST ARA-01 and the correct fee payment process. Due to the non-compliance with these statutory provisions, the application was deemed invalid and liable for rejection under Section 98(2) of the CGST Act, 2017.Consequently, the Authority ruled that the application from the applicant was rejected under Section 98(2) of the CGST/GGST Act, 2017 due to being non-maintainable. The rejection was based on the applicant's failure to adhere to the prescribed application format and fee payment requirements, rendering the application invalid for an Advance Ruling. The ruling emphasized the importance of compliance with statutory provisions for submitting applications to the Advance Ruling Authority, highlighting the need for proper adherence to procedural guidelines outlined in the relevant Acts and Rules governing GST.