Advance ruling application rejected for lack of standing when applicant neither supplier nor seeking input tax credit under Section 95-103

AAR Gujarat rejected the advance ruling application for lack of locus standi. The applicant sought to determine GST liability of their sub-lessor regarding electricity charges recovered from tenants based on sub-meter readings. The AAR held that advance ruling applications can only be filed by suppliers of goods/services or those seeking input tax credit rulings for supplies received by them. Since the applicant was neither the supplier nor seeking input tax credit on received supplies, they lacked standing to file the application under Sections 95, 97, 98, and 103 of CGST Act, 2017.

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Issues:
1. Liability of sub-lessor for GST on electricity charges.
2. Consideration of electricity charges as recovered amount or pure agent.
3. Effective date of advance ruling.

Analysis:

Liability of sub-lessor for GST on electricity charges:
The applicant sought an advance ruling on whether the sub-lessor is liable to charge and pay GST on electricity charges collected from the tenant. The applicant argued that the electricity charges paid were merely a reimbursement of expenses on an actual basis and that the sub-lessor acted as a 'pure agent'. The sub-lessor contended that the electricity charges were incidental charges to the rent and hence liable for GST. The Authority considered the relevant provisions of the CGST Act and GGST Act and noted that the applicant was not the supplier of the service and the ruling sought did not pertain to input tax credit. Consequently, the Authority held that the applicant lacked standing to seek a ruling in this case, and thus rejected the application.

Consideration of electricity charges as recovered amount or pure agent:
The applicant also inquired whether the electricity charges paid by the sub-lessor to the electricity supplier, based on sub-meters from different tenants, could be considered as amount recovered as a pure agent of the tenant. The Authority emphasized that the ruling sought did not relate to the admissibility of input tax credit for the supply received by the applicant. As per the provisions of the CGST Act, the ruling was limited to specific issues listed in Section 97(2). Since the applicant was not the supplier of the service and the ruling did not concern input tax credit, the Authority determined that the applicant did not have the necessary standing to seek a ruling on this matter.

Effective date of advance ruling:
Lastly, the applicant questioned whether the advance ruling could be effective from the beginning of the rent agreement date. However, the Authority's decision to reject the application under Section 98(2) of the CGST Act, 2017, along with Sections 95(a), (c), and 103, implied that the ruling was not granted. Therefore, the question regarding the effective date of the advance ruling became moot in light of the rejection of the application.

In conclusion, the Authority rejected the applicant's request for an advance ruling on the grounds that the applicant lacked standing to seek a ruling in the present case, as the issues raised did not fall within the scope of the provisions governing advance rulings under the CGST Act, 2017.

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