AAR rejects advance ruling application for non-disclosure of pending DGGI investigation under Section 70 CGST Act

The AAR Tamil Nadu rejected an advance ruling application due to non-disclosure of ongoing proceedings. The applicant failed to reveal that DGGI Chennai Zonal Unit was conducting investigations under Section 70 of CGST Act. The AAR held that the first proviso to Section 98(2) covers any proceedings under the Act, including Section 70 investigations. Since proceedings were pending against the applicant on the date of filing the advance ruling application, it was liable for rejection under the first proviso to Section 98(2).

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Issues Involved:
1. Whether GST is applicable on various fees collected by Tamil Nadu Medical Council.
2. Admissibility of the advance ruling application in light of ongoing investigations.

Summary:

Issue 1: GST Applicability on Fees Collected by Tamil Nadu Medical Council

The applicant, Tamil Nadu Medical Council, constituted under the Madras Medical Registration Act, 1914, collects fees for registration and allied activities. The Council argued that these fees are for statutory functions and not for services rendered, thus should not be subject to GST. They cited Black's Dictionary and previous rulings, asserting that the fees are akin to taxes and duties, not covered by GST Act. The State authority confirmed that the Council is not a service provider and GST is not applicable on the fees collected.

Issue 2: Admissibility of Advance Ruling Application

The applicant's request for an advance ruling was scrutinized due to an ongoing investigation by the Directorate General of GST Intelligence (DGGI) regarding non-payment of GST on the fees collected. Section 98(2) of the CGST Act prohibits admitting an application if the question raised is already pending or decided in any proceedings. The applicant argued that 'proceedings' do not include investigations or inquiries. However, the Authority concluded that the term 'proceedings' in the first proviso to Section 98(2) encompasses investigations under Section 70 of the Act. The High Court of Andhra Pradesh's ruling in Master Mind Vs Appellate Authority for Advance Ruling supported this interpretation. Consequently, the application was rejected as the issues were already under investigation.

Ruling:

The advance ruling application is rejected for the reasons discussed in para 7 supra.

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