Input Tax Credit Eligibility Application Rejected: Authority Lacks Jurisdiction Under Section 95(a) of CGST Act for Third-Party Queries

The Advance Ruling Authority rejected an application by a subsidiary company seeking clarification on Input Tax Credit (ITC) eligibility for Lambda Therapeutic Research Ltd. The Authority determined it lacked jurisdiction as the query concerned a taxable person not registered in Telangana. Additionally, Section 95(a) of CGST Act limits advance rulings to questions directly related to the applicant's supply of goods or services. Since the query pertained to ITC eligibility of a third party rather than the applicant's own supply activities, the application was dismissed on jurisdictional and statutory grounds.

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Issues Involved:
1. Jurisdiction of the Advance Ruling Authority.
2. Eligibility of Input Tax Credit (ITC) for the recipient.

Jurisdiction of the Advance Ruling Authority:
The case involved an application filed by M/s. Granules USA Inc., a subsidiary of Granules India Limited, seeking clarification on the eligibility of Lambda Therapeutic Research Ltd. to avail Input Tax Credit (ITC) paid by World Courier. The Authority noted that Section 96 of the CGST and SGST Acts establish the territorial nexus of an Advance Ruling authority, specifying that it shall function as such for the state or union territory in which it is constituted. As the question raised by the applicant pertained to a taxable person not registered in Telangana, the Authority concluded that an Advance Ruling cannot be provided for such a person based on this provision.

Eligibility of Input Tax Credit (ITC) for the recipient:
The applicant argued that Lambda Therapeutic Research Ltd., as the recipient of the goods, should be eligible to claim the IGST paid by World Courier and pass on the credit to Granules India Limited, the ultimate recipient. However, the Authority pointed out that Section 95(a) of the CGST Act defines Advance Ruling as a decision provided on questions "in relation to the supply of goods or services" undertaken by the applicant. Since the query raised was not directly related to the supply of goods or services by the applicant, the Authority concluded that an Advance Ruling could not be issued in this case.

In consideration of the statutory provisions and the reasons discussed, the Authority rejected the application for Advance Ruling submitted by M/s. Granules USA Inc. The decision was based on the lack of jurisdiction due to the applicant's registration status and the nature of the query raised, which did not directly concern the supply of goods or services by the applicant.

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