Advance ruling application rejected for seeking clarification on supplies by another entity

The advance ruling application regarding liability to pay tax on services under specific clauses of the CGST Act 2017 was deemed inadmissible and rejected. The ruling authority clarified that the applicant can only seek rulings in relation to their own supplies, not those of other entities. As the applicant sought a ruling on supplies by another company, the application was rejected under Section 98(2) of the CGST Act 2017. The judgment highlights the necessity of aligning advance ruling applications with relevant tax laws to avoid inadmissibility.

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Issues:
- Admissibility of the advance ruling application regarding liability to pay tax on service under specific clauses of the CGST Act 2017.

Analysis:
The applicant, engaged in support engineering service and dealing in CNC machines and cutting tools, sought an advance ruling on the liability to pay tax on services under specific clauses of the CGST Act 2017 related to the change in business operations of M/s. Mysore Stoneware Pipes and potteries Limited. The company transitioned into real estate activities, obtained necessary approvals, entered into a joint development agreement, and sold developed sites to purchasers. The applicant highlighted ongoing shareholder disputes before the NCLT and sought clarity on the applicability or exemption of GST on transactions related to the sale of assets. During the personal hearing, the applicant reiterated the facts stated in the application.

The ruling authority clarified that any person seeking an advance ruling under the CGST Act 2017 can only do so in relation to the supply of goods or services undertaken or proposed by the applicant. In this case, the applicant sought a ruling regarding supplies undertaken by M/s. Mysore Stoneware Pipes and potteries Private Limited, not by the applicant themselves. Therefore, the application was deemed inadmissible and rejected under Section 98(2) of the CGST Act 2017. The ruling concluded by rejecting the application as "inadmissible" based on the specified legal provision.

This judgment emphasizes the importance of aligning the subject of an advance ruling application with the provisions of the relevant tax laws. It underscores the need for applicants to ensure that the questions posed for ruling directly pertain to the goods or services they are involved in supplying or intend to supply. Failure to meet this criterion can lead to the rejection of the application on grounds of inadmissibility, as demonstrated in this case.

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