2022 (6) TMI 530 - AAR - GST

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 ... Maintainability of application for advance ruling - recipient of services - Benefit of Concessional rate of tax - works contract service received from the contractors - applicability of Entry No. 3(v) (da) of Notification 11/2017 Central Tax (Rate) dated 28/06/2017, as amended time to time - construction of common amenities such as club house, swimming pool and amenities of like nature - HELD THAT:- Sub-section (1) of section 103 of the CGST Act, 2017 categorically speaks that the ruling pronounced is binding only on the applicant and on the concerned officer or the jurisdictional officer in respect of the applicant. If an application is filed by the recipient of goods or services or both on the taxability of his inward supply of goods or services and ruling is pronounced accordingly, such ruling shall be binding only on him and on the concerned officer or the jurisdictional officer of him. In no way, the ruling shall be binding on the supplier of such goods or services. Any provisions of the Law, therefore, should not be interpreted in a way which defeats the very purpose of the objective and purpose of the legal provision. Thus, in the subject application, the applicant cannot seek an advance ruling in relation to the supply where it is a recipient of services. Since provisions of Sec 95 (a) are very clear and unambiguous that only a supplier can file application for advance ruling, hence, the contentions of the applicant are not accepted. Thus, no ruling can be given on the Questions, since the applicant is recipient of services in respect of supplies involved. 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.