Retrospective GST Invoices for Job Work Services from FY 17-19 Deemed Inadmissible Under Section 97(2)

The AAR rejected a job work service provider's application seeking rulings on retrospectively issued GST invoices for FY 17-19 services. The Authority determined the application was not maintainable under Section 97(2) of CGST Act as it primarily concerned invoice validity rather than tax liability or ITC admissibility. During proceedings, the applicant withdrew questions about tax recovery from principal suppliers and ITC eligibility for recipients. The AAR clarified that even if ruled upon, any decision would bind only the applicant and its jurisdictional officer, not its customers.

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Issues:
1. Validity of tax invoice for job work done during FY 18-19
2. Right of taxpayer to recover tax from principal supplier
3. Eligibility of recipient to claim Input Tax Credit (ITC)

Analysis:

Issue 1: Validity of tax invoice for job work done during FY 18-19
Acme, a company providing job work services, raised tax invoices in Feb 2020 and July 2020 for job work done in FY 17-18 and FY 18-19. The company did not charge GST initially but later rectified this by issuing tax invoices to pass on the credit to the recipient. The Advance Ruling Authority analyzed the application under Section 97(2) of the CGST Act, which includes questions related to the admissibility of Input Tax Credit (ITC) and determination of tax liability. However, the Authority found that the questions raised did not fall under the purview of Section 97(2) as they were more about the validity of tax invoices rather than tax liability or ITC admissibility. Therefore, the Authority held that the application was not maintainable under the statutory provisions and rejected it.

Issue 2: Right of taxpayer to recover tax from principal supplier
Acme sought clarification on whether it could recover tax from the principal supplier after issuing tax invoices retrospectively. During the personal hearing, Acme's representative requested the Authority to focus on the validity of the tax invoice issued by Acme rather than the recovery of tax from the principal supplier. As a result, Acme withdrew the questions related to the recovery of tax. This issue was not addressed further in the ruling due to the focus shifting to the validity of the tax invoice.

Issue 3: Eligibility of recipient to claim Input Tax Credit (ITC)
One of the questions raised by Acme was whether the recipient could claim Input Tax Credit (ITC) based on the tax invoices issued by Acme. However, the Authority clarified that the purpose of Acme's application was to seek a ruling on the admissibility of ITC for its customers, which falls under Section 97(2) of the CGST Act. The ruling provided by the Authority would be binding only on Acme and its jurisdictional officer, not on Acme's customers. Acme's representative requested to withdraw the questions related to ITC eligibility during the personal hearing, and the Authority focused on addressing the validity of the tax invoice issued by Acme.

In conclusion, the Advance Ruling Authority rejected Acme's application as it did not fall within the scope of Section 97(2) of the CGST Act. The ruling clarified that the questions raised by Acme were more about the validity of tax invoices rather than issues related to tax liability or Input Tax Credit eligibility. The ruling would only be binding on Acme and its jurisdictional officer, not on Acme's customers.

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