2023 (9) TMI 855 - AAAR - GST

Metro rail corporation cannot seek advance ruling as service recipient under Section 95(a) CGST Act 2017

In Re: M/s. Uttar Pradesh Metro Rail Corporation Ltd.

The AAAR, UP dismissed an advance ruling application filed by a metro rail corporation seeking ruling on construction, erection and commissioning services ... Scope of Advance Ruling application - appellant is service recipient - construction, erection and commissioning of metro rail facility all over the state of Uttar Pradesh - Section 95 of the CGST Act 2017 - HELD THAT:- The appellant is receiving services from M/s KESCO and opts to seek advance Ruling under Section 95 of the CGST Act 2017 as a receiver of service - It is also found that the Authority for Advance Ruling has ruled that the “Applicant M/S Uttar Pradesh Metro Rail Corporation Limited is receiver of the Goods/Services provided by M/s KESCO and under the provision of clause (a) of Section 95 of CGST Act 2017, only supplier of the services can file Application for Advance Ruling and accordingly no ruling can be given in the matter.” Needless to say that meaning of the term “applicant” as defined under clause (c) of Section 95 of the act, should be derived only in consonance with clause (a) of Section 95 of the CGST Act 2017 which clearly provides that the applicant of Advance Ruling Should be related to a taxpayer who supplies the goods or services or both or who proposes to make supplies in future. As the wordings says the “supply of goods or services or both and not the “receipt of goods or services or both”. This implies that the applicants seeking advance ruling should be suppliers of goods/services and not the recipient of goods/services. The appellant being a service recipient is not eligible to seek advance ruling under the provisions of Section 95 (a) of the CGST Act, 2017. Issues involved:The appeal under Section 100 of the CGST Act and UPSGST Act against the Advance Ruling Order by the Authority for Advance Ruling, Uttar Pradesh.Brief facts of the case:The appellant, a registered assessee engaged in construction of metro rail facility in Uttar Pradesh, faced a tax dispute with KESCO regarding GST on shifting of power lines. The appellant sought clarification on various questions related to the services provided by KESCO.Grounds of appeal:The appellant challenged the ruling stating they have the right to seek advance ruling as a receiver of services under Section 95 of the CGST Act. Citing precedents from Calcutta High Court, the appellant argued for their eligibility to file the application and have the matter decided on merit.Discussion and findings:The Appellate Authority found that as per Section 95 of the CGST Act, only the supplier of services can file for an advance ruling, not the recipient. The Law Committee and GST Policy wing confirmed this interpretation, emphasizing that advance ruling is applicable only to suppliers. The Authority rejected the appellant's claim based on the legal provisions and recommended appealing against the contrary High Court orders.Conclusion:The Appellate Authority affirmed the ruling of the Authority for Advance Ruling, stating that the appellant, being a service recipient, is not eligible to seek an advance ruling under Section 95(a) of the CGST Act. The appellant's appeal was dismissed, upholding the original ruling against them.