2024 (7) TMI 1343 - AAR - GST

AAR Kerala rejects advance ruling on job-worker delivery note obligations and valuation requirements under section 97(2)

The AAR Kerala rejected an advance ruling application regarding job-worker obligations for delivery notes and e-way bills when principals don't issue ... Scope of Advance Ruling application - issuance of delivery note and e-way bill by job-worker, if the principle is not issuing the delivery note - Value to be shown in delivery note and in e-way bill by the job worker pre and post job work - Any other related or associated questions - HELD THAT:- The questions do not fall under the purview of any of the clauses of section 97 (2) of the CGST/KSGST Act 2017. Moreover section 98 of the Act specifies the procedures to be followed on the processing of receipt of an advance ruling application. As per subsection (1) of section 98, the authority shall forward a copy of the application to the concerned jurisdictional officer, if necessary, call upon him to furnish the relevant records. Sub-section (2) of section 98 provides that the authority can either admit or reject the application after examining the application and records called for and hearing the applicant and the jurisdictional officer either directly or through authorized representative. On a combined reading of the above provisions governing advance ruling under the CGST Act it is evident that the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of the CGST/SGST Act. The applicant does not raised any other related or associated questions. Issues involved:1. Whether a job worker can issue a delivery note and e-way bill if the principal is not issuing the delivery note.2. The value to be shown in the delivery note and e-way bill by the job worker pre and post job work.3. Any other related or associated questions resulting from the above two questions.Analysis:Issue 1: Whether a job worker can issue a delivery note and e-way bill if the principal is not issuing the delivery note.The applicant, engaged in job work of Aluminium Powder Coating, sought clarification on the process of issuing delivery notes and e-way bills when the principal does not provide them. The applicant faced challenges in generating e-way bills due to confusion regarding the inclusion of service charges in the value of goods. The applicant highlighted the lack of guidance from GST authorities and the difficulties faced in transporting goods back to the principal. The circular issued by CBEC did not address the specific concerns raised by the applicant. The jurisdictional officer reported discrepancies in outward taxable supply, leading to a notice served to the applicant.Issue 2: The value to be shown in the delivery note and e-way bill by the job worker pre and post job work.The applicant encountered issues with generating e-way bills using SAC codes for services and faced challenges when the principal was unregistered, unable to generate e-way bills. This led to the job worker using HSN codes and adding the value of materials and job work charges in the e-way bill. However, such consignments were withheld due to discrepancies in the value of goods transported, resulting in tax liabilities for the applicant. The applicant requested clarification on whether service charges should be added to the value of goods in the delivery challan and e-way bill.Issue 3: Any other related or associated questions resulting from the above two questions.The ruling authority examined the admissibility of the questions raised for advance ruling under the CGST Act. It was noted that the questions did not fall under the purview of the clauses specified in the Act for seeking advance rulings. The authority highlighted the procedures to be followed in processing advance ruling applications and the requirement to not admit applications where questions are pending or decided in other proceedings under the Act. The ruling concluded that no ruling could be given on the questions raised as they did not align with the provisions of the CGST Act.In summary, the ruling authority declined to provide a ruling on the questions raised by the applicant regarding the issuance of delivery notes and e-way bills by job workers in the absence of the principal's documentation, citing that the questions did not fall under the specified clauses of the CGST Act for seeking advance rulings.