Service recipient cannot file advance ruling application under Section 95(a) CGST Act only suppliers eligible

The AAR Maharashtra dismissed an advance ruling application filed by a service recipient regarding works contract services and concessional rate benefits for construction of common amenities. The AAR held that under Section 95(a) of the CGST Act, 2017, only suppliers can file advance ruling applications, not recipients of goods or services. Since the applicant was the recipient of construction services from contractors rather than the supplier, the questions were not maintainable. The AAR emphasized that advance rulings bind only the applicant and concerned officers, and cannot bind suppliers when filed by recipients. The applicant's representative agreed during hearing that the questions fell outside the scope of Section 95(a).

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Issues Involved:
1. Applicability of Entry No. 3(v)(da) of Notification 11/2017-C.T.(R) to works contract services received from contractors.
2. Availability of concessional rate for construction of common amenities like club house, swimming pool, etc.

Issue-wise Detailed Analysis:

1. Applicability of Entry No. 3(v)(da) of Notification 11/2017-C.T.(R) to Works Contract Services Received from Contractors:
- The applicant, M/s Romell Real Estate Private Limited, sought an advance ruling to determine if Entry No. 3(v)(da) of Notification 11/2017-CT (Rate) dated 28/06/2017, as amended, applies to the 'works contract service' received from its contractors.
- The project in question qualifies as an 'Affordable Housing Project' (AHP) with more than 50% of Floor Space Index (FSI) utilized for units below 60 sq. mts.
- The applicant referred to previous rulings and notifications, arguing that the works contractors should levy GST at 12% in terms of the Notification 11/2017-CT (R).
- The jurisdictional officer concurred that the benefit of the reduced rate of 6% CGST is available to contractors providing composite supply of works contract to the developer for units up to 60 sq. mts. However, the benefit is not applicable to units exceeding this size.
- The authority observed that Section 95(a) of the GST Act specifies that only the supplier, not the recipient, can seek an advance ruling. Since the applicant is the recipient of services, the questions posed do not fall within the scope of Section 95(a).

2. Availability of Concessional Rate for Construction of Common Amenities:
- The applicant also sought clarity on whether the concessional rate applies to the construction of common amenities such as a club house, swimming pool, etc.
- The jurisdictional officer stated that amenities like club houses and swimming pools are not covered under the descriptions specified in Sr. No. 3(v)(da) of Notification 11/2017 as amended by Notification 1/2018. Therefore, the concessional rate would not apply to works contract services for these amenities.
- The authority reiterated that the applicant, being the recipient and not the supplier of services, cannot seek an advance ruling on these matters as per Section 95(a) of the GST Act.

Observations and Findings:
- The authority emphasized that the provisions of Section 95(a) are clear and unambiguous, allowing only suppliers to file an application for an advance ruling.
- The applicant's argument that the term 'supply of goods or services or both' includes both inward and outward supply was not accepted.
- The ruling would only be binding on the applicant and the concerned officer, not on the supplier of goods or services, rendering the ruling ineffective if the supplier does not adhere to it.
- The authority concluded that the applicant cannot seek an advance ruling in relation to supplies where they are the recipient.

Order:
- The questions raised by the applicant were not answered due to the reasons discussed.
- The authority did not provide a ruling on whether Entry No. 3(v)(da) of Notification 11/2017-C.T.(R) applies to works contract services received from contractors or if the concessional rate applies to the construction of common amenities.

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