EOU advance ruling application dismissed for lacking jurisdiction over tax refund questions under Section 97(2) GST Act

The AAR Tamil Nadu dismissed an advance ruling application filed by an EOU regarding IGST payment procedures and refund entitlements on imports/exports. The authority held that questions relating to tax refunds fall outside its jurisdiction under Section 97(2) of GST Act. Additionally, the applicant, being a recipient of supplies rather than a supplier, lacked eligibility to seek advance ruling under Section 95(a), which restricts applications to suppliers only. The authority concluded it had no jurisdiction to admit questions concerning refund of taxes paid or procurement procedures for EOUs.

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Issues Involved:
1. Procedure for paying IGST/Compensation Cess on import of goods by an EOU.
2. Eligibility to export goods on payment of IGST and claim refund under Rule 96(10) of CGST Rules, 2017.
3. Compulsory procurement of goods/services without payment of tax from domestic suppliers by an EOU.
4. Compulsory application in FORM RFD-01 for refund under Rule 89(4) of CGST Rules, 2017.

Detailed Analysis:

Issue 1: Procedure for paying IGST/Compensation Cess on import of goods by an EOU
The applicant sought clarification on whether an Export Oriented Unit (EOU) can follow the procedure prescribed in the "Explanation to Rule 96(10) of CGST Rules, 2017" as per Notification 16/2020 - Central Tax dated 23rd March 2020 and effective from 23.10.2017, which involves paying IGST/Compensation Cess on import of goods. The Authority for Advance Ruling (AAR) stated that questions related to the procedure for claiming refunds fall outside the purview of the Advance Ruling Authority as per Section 97(2) of the GST Act, which does not cover refund-related queries.

Issue 2: Eligibility to export goods on payment of IGST and claim refund under Rule 96(10) of CGST Rules, 2017
The applicant inquired if, after following the procedure mentioned in Issue 1, they could continue to export goods on payment of IGST and claim refunds under Rule 96(10) of CGST Rules, 2017 read with Section 16(3) of IGST Act, 2017. The AAR reiterated that this question also pertains to the procedure for claiming refunds, which is outside the jurisdiction of the Advance Ruling Authority.

Issue 3: Compulsory procurement of goods/services without payment of tax from domestic suppliers by an EOU
The applicant asked whether it is compulsory for an EOU to procure goods/services without payment of tax from domestic suppliers as per Notification No. 48/2017-Central Tax dated 18th October 2017 read with Section 147 of CGST Act, 2017. The AAR clarified that the question relates to the procurement of goods/services, which is not covered under the definition of 'Advance Ruling' as per Section 95(a) of the CGST/TNGST Act. The ruling pertains to the supply of goods/services made or proposed to be made by the applicant, not to the procurement.

Issue 4: Compulsory application in FORM RFD-01 for refund under Rule 89(4) of CGST Rules, 2017
The applicant sought clarification on whether it is compulsory for an EOU to apply in FORM RFD-01 and get a refund under Rule 89(4) of CGST Rules, 2017. The AAR stated that this question also falls under the category of refund procedures, which is outside the scope of the Advance Ruling Authority as per Section 97(2) of the GST Act.

Ruling:
(i) Questions 1, 2, and 4, which pertain to the applicability of the explanation inserted to the rules governing the provisions of 'REFUNDS' of Integrated tax paid by the applicant, fall outside the purview of Section 97(2) and are therefore not admitted.
(ii) Question 3, which concerns the receipt of supply by the applicant and not the supply made by them, is also outside the purview of the Advance Ruling Authority as per Section 97(2) of the GST Act.

Conclusion:
The entire application was rejected as the questions raised were either related to refund procedures or pertained to procurement, both of which fall outside the jurisdiction of the Advance Ruling Authority.

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