2021 (11) TMI 394 - AAR - GST

Tax Invoice Requirements: SAC for services, HSN for goods. No separate Karnataka registration. Input Service Distributor limitation.

The authority refrained from providing a ruling on the classification of services and the use of SAC or HSN codes in tax invoices, stating it is beyond ... Composite supply of goods and services (works contract) - place of supply in relation to immovable property - location of the supplier of services - inter State supply under IGST - registration in the State from where taxable supply is made - Input Service Distributor registration and distribution of ITC - HSN or SAC requirement in tax invoice and e waybillHSN or SAC requirement in tax invoice and e waybill - composite supply of goods and services (works contract) - Whether the Authority may rule on whether HSN or SAC should be mentioned in the invoice for the fabricated steel structures moved to the work site - HELD THAT: - The advance ruling applicant sought guidance on whether to mention SAC (as a works contract/service classification) or HSN (as goods moved) in invoices and on the e waybill. The Authority found that the question relates to the form and particulars to be furnished in tax invoices and to classification aspects that fall outside the scope of matters it may decide under Section 97(2) of the CGST Act. Consequently the Authority refrained from answering that question. The Authority nevertheless clarified, by way of general observation, that where an invoice is for supply of goods or services the HSN covering the transaction should be mentioned when mandated, whereas an e waybill records movement of goods and should carry the HSN and value of the goods moved; this clarification was not treated as a binding ruling on classification or invoicing particulars. [Paras 11]The Authority refrains from giving any ruling on whether HSN or SAC must be mentioned in the invoice, as the question is beyond its jurisdiction; a non binding observation on invoice versus e waybill particulars is recorded.Registration in the State from where taxable supply is made - location of the supplier of services - place of supply in relation to immovable property - inter State supply under IGST - Whether the applicant is required to obtain separate GST registration in Karnataka for executing the works contract at Karwar - HELD THAT: - Section 22(1) requires registration in the State from where a supplier makes taxable supplies. Section 2(71) identifies the location of the supplier of services as the place of business for which registration has been obtained, or a fixed establishment if services are supplied from such. The applicant's principal place of business and registration is at Noida (UP) and it has admitted it has no fixed establishment in Karnataka. Section 12(3) of the IGST Act makes the place of supply of immovable property related services the location of the immovable property (Karwar), and Section 7(3) treats supplies where supplier location and place of supply are in different States as inter State supplies. Applying these provisions, the place of supply is Karnataka but the location of the supplier remains the Noida registration; therefore the supply is inter State and the applicant may supply from its Noida registration charging IGST. No separate registration in Karnataka is required where the applicant has no fixed establishment there. [Paras 12, 13, 14, 15, 16]The applicant need not obtain separate registration in Karnataka and may raise invoices from its Noida registration charging IGST, with place of supply as Karnataka.Input Service Distributor registration and distribution of ITC - registration in the State from where taxable supply is made - Whether the applicant can obtain ISD registration in Karnataka to receive and distribute input tax credit for services procured locally at the Karwar site - HELD THAT: - An Input Service Distributor (ISD) is defined as an office of the supplier which receives tax invoices and distributes credit to suppliers having the same PAN. Section 24(viii) requires ISDs to be registered. The Authority found as an admitted fact that the applicant neither has nor intends to have any establishment at Karwar; because ISD registration must be for the premises from which credit is to be distributed, the applicant cannot obtain ISD registration for the Karwar site where it has no establishment. [Paras 17, 19, 20]The applicant cannot obtain ISD registration for the Karwar site as it does not have and does not intend to have an establishment there.Final Conclusion: The Authority declined to rule on the HSN/SAC invoice question as beyond its jurisdiction; held that the applicant, having its registration and place of business at Noida and no fixed establishment in Karnataka, need not obtain separate registration in Karnataka and may invoice from Noida charging IGST with place of supply Karnataka; and held that ISD registration in Karnataka is not available to the applicant because it has no establishment at Karwar. Issues Involved:1. Classification of services and the use of SAC or HSN codes in tax invoices.2. Requirement for registration in Karnataka for executing the works contract.3. Registration as an Input Service Distributor (ISD) and distribution of Input Tax Credit (ITC).Detailed Analysis:Issue 1: Classification of Services and Use of SAC or HSN CodesThe applicant sought clarification on whether to use SAC or HSN codes in the tax invoices for goods moved from Noida to Karwar for a works contract. The main contractor, L&T, classified the entire contract as a service under SAC 995416, raising concerns about discrepancies in e-way bills which require HSN codes for goods.- Ruling: The authority refrained from providing a ruling on this issue, stating it is beyond their jurisdiction as per Section 97(2) of the CGST Act 2017. However, they noted that invoices for services should mention the SAC, while e-way bills for goods movement should mention the HSN code of the goods being transported.Issue 2: Requirement for Registration in KarnatakaThe applicant questioned whether they needed to register in Karnataka to execute the works contract, given that they are registered in Noida, Uttar Pradesh.- Ruling: The applicant does not need a separate registration in Karnataka. They can raise invoices from their registered office in Noida, UP, charging IGST with the place of supply being Karnataka. The authority referenced Section 22(1) of the CGST Act 2017, which requires registration in the state from where the taxable supply is made. Since the applicant's principal place of business is in Noida and they have no fixed establishment in Karnataka, registration in Karnataka is not required.Issue 3: Registration as Input Service Distributor (ISD)The applicant inquired if they should register as an ISD in Karnataka to distribute ITC for services procured locally.- Ruling: The applicant cannot obtain ISD registration in Karnataka as they do not have and do not intend to have any establishment in Karnataka. The authority cited Section 2(61) of the CGST Act 2017, which defines an ISD as an office that receives tax invoices and distributes ITC. Since the applicant lacks an establishment in Karnataka, they cannot register as an ISD there.Conclusion:1. HSN or SAC Codes: No ruling provided; invoices for services should use SAC, and e-way bills for goods should use HSN.2. Registration in Karnataka: Not required; invoices can be raised from Noida, UP, charging IGST.3. ISD Registration: Not possible without an establishment in Karnataka.