AAR dismisses advance ruling application as only suppliers can file under Section 95 CGST Act 2017, not service recipients

The AAR, UP dismissed an advance ruling application filed by a service recipient regarding taxability of leasehold land sale activities. The Authority held that under Section 95 of CGST Act 2017, only suppliers of goods/services can file applications for advance ruling, not service recipients. Since the applicant was receiving services from another entity rather than supplying them, they lacked standing to seek advance ruling. The application was rejected on jurisdictional grounds without examining the merits of the taxability question raised.

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Issues:
The judgment involves the issue of whether the activity relating to the sale of leasehold land and obtaining permission for such sale would be taxable under the GST provisions.

Comprehensive Details:
The applicant, a registered assessee under GST, sought an advance ruling on the taxability of the sale of an industrial plot originally allotted by Noida Authority under a 99-year lease deed. The applicant's interpretation of the law highlighted the distinction between leasehold and freehold property, emphasizing that the sale of land is not within the ambit of GST. They also referenced the Income Tax Act, stating that long-term lease of land constitutes a 'deemed sale,' which should not be subject to GST. Additionally, they mentioned an exemption under notification No. 12/17-Central Tax (Rate) that exempts leasing of industrial plots for thirty years or more from GST.

The Authority for Advance Ruling, Uttar Pradesh, examined the application and found that the applicant, being a receiver of goods/services, fell under the category of service recipient, not a supplier. As per the provisions of the CGST Act, only suppliers of goods/services can seek an advance ruling. Therefore, the application was not admitted for consideration on its merits, and no ruling was given in the matter.

The ruling stated that it was valid only within the jurisdiction of the Authority for Advance Ruling, Uttar Pradesh, and subject to the provisions of the CGST Act until declared void under Section 104(1) of the Act.

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