Service recipients cannot file advance ruling applications under Section 95(a) CGST Act 2017, only suppliers can apply

AAR Maharashtra held that an application for advance ruling filed by a service recipient seeking concessional tax rate benefits under Notification 11/2017 for works contract services related to construction of common amenities was not maintainable. The Authority ruled that only suppliers can file applications for advance rulings under Section 95(a) of CGST Act, 2017, not recipients of services. Since the applicant was a service recipient, no ruling could be pronounced on the questions raised regarding taxability of inward supplies.

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Issues:
1. Interpretation of Entry No. 3(v) (da) of Notification 11/2017 Central Tax (Rate) regarding works contract service received from contractors.
2. Availability of concessional rate for construction of common amenities in affordable housing projects.

Analysis:

Issue 1:
The applicant sought an advance ruling on whether Entry No. 3(v) (da) of Notification 11/2017 Central Tax (Rate) applies to works contract services received from contractors. The applicant argued that their project qualifies as an Affordable Housing Project (AHP) and should benefit from the concessional rate of GST for services from contractors. They referenced a ruling by the West Bengal Advance Ruling Authority to support their claim. However, the Authority observed that the applicant, as the recipient of services, cannot seek an advance ruling on matters where they are not the supplier. The Authority highlighted that rulings are binding only on the applicant and concerned officers, not on suppliers. Therefore, the applicant's contentions were not accepted, and no ruling was provided on this issue.

Issue 2:
The second issue raised by the applicant was whether the concessional rate would apply to the construction of common amenities like a club house or swimming pool in affordable housing projects. The Authority reiterated that the applicant, as the recipient of services, cannot seek an advance ruling on such matters. They emphasized that the provisions of the law should not be interpreted in a way that defeats their purpose. Therefore, the Authority concluded that no ruling could be given on this question as well.

In conclusion, the Authority held that the applicant, being the recipient of services in the transactions in question, cannot seek an advance ruling. The rulings provided by the Authority are binding only on the applicant and concerned officers. As a result, no rulings were issued on the questions raised by the applicant regarding the applicability of Entry No. 3(v) (da) of Notification 11/2017 Central Tax (Rate) and the availability of concessional rates for common amenities in affordable housing projects.

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