Advance ruling delay is directory; government service charges to a business entity attract reverse charge GST.
The ninety-day period for pronouncing an advance ruling under Section 98(6) of the CGST Act was treated as directory, not mandatory, because the statute does not state that delay makes the ruling void and no prejudice or denial of natural justice was shown. The objection to delay was therefore rejected. Permission charges, reinstatement charges, road cutting charges and ground rent charges levied by Goa PWD were held taxable under reverse charge, as the notification applies where services are supplied by the Central Government, State Government, Union territory or local authority to a business entity. The appellate authority also declined to expand the ruling into broader taxability questions not raised in the application.
Issues: (i) Whether the advance ruling was invalid for having been pronounced beyond the ninety-day period under Section 98(6) of the CGST Act, 2017. (ii) Whether permission charges, reinstatement charges, road cutting charges and ground rent charges levied by Goa PWD authorities were liable to GST under reverse charge in terms of Serial No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017.
Issue (i): Whether the advance ruling was invalid for having been pronounced beyond the ninety-day period under Section 98(6) of the CGST Act, 2017.
Analysis: The ninety-day period was treated as prescribing a procedural time frame only. The provision was held to be directory because it does not expressly provide that breach of the time limit renders the ruling void or invalid. No prejudice or violation of natural justice was shown on account of the delay.
Conclusion: The delay did not invalidate the advance ruling, and the objection was rejected.
Issue (ii): Whether permission charges, reinstatement charges, road cutting charges and ground rent charges levied by Goa PWD authorities were liable to GST under reverse charge in terms of Serial No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017.
Analysis: Serial No. 5 of Notification No. 13/2017-Central Tax (Rate) places GST liability on the business entity recipient where services are supplied by the Central Government, State Government, Union territory or local authority. Goa PWD was treated as falling within the relevant government category, and the appellant was a business entity receiving the supply. The appellate authority also declined to enter into a fresh determination on wider taxability issues not sought in the advance ruling application.
Conclusion: The charges were held liable to GST under reverse charge in the hands of the appellant.
Final Conclusion: The appeal failed and the advance ruling was sustained, with liability to pay GST under reverse charge affirmed against the appellant.
Ratio Decidendi: A procedural time limit in an advance ruling provision is directory unless the statute attaches invalidating consequences, and where a government or local authority supplies services to a business entity, reverse charge liability follows the specific notification governing such supplies.
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