TaxTMI 
TaxTMI 
2020 (3) TMI 186
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....attract GST since the subject transaction would quality for "Export of Services" in terms of Section 2(6) of IGST Act, 2017. (ii) issue such other appropriate writ, direction or order as deemed fit by this Honourable court, considering the facts and circumstances of the case, in the interest of justice." 2. Heard Sri.Joseph Prabakar, learned counsel appearing for the petitioner, Smt.Preetha S.Nair, learned Central Government Counsel (CGC) appearing for R-1 & R-3 and Dr.Thushara James, learned Government Pleader appearing for R-2. 3. The case projected in this Writ Petition (Civil) is as follows:- The petitioner, M/s.Sutherland Mortgage Services Inc., now functioning in the office premises in the Cochin Special Economic Zone, is a branch office of its principal, M/s. Sutherland Mortgage Service Inc. USA. The petitioner is stated to be engaged in the business of providing information technology enabled services such as mortgage orientation, primary servicing, special servicing, cash management and analytics & reporting. It is stated the principal company, M/s.Sutherland Mortgage Service Inc. USA. is incorporated in the United States of America and, as per the applicabl....
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....d out that Sec. 100 of the CGST Act provides for a statutory appeal before the appellate authority concerned only if the impugned advance ruling is rendered under Sec. 98(4) of the CGST Act and not against the order of rejection as in the nature of Ext.P-2 herein, which has been purportedly issued under Sec. 98(2) of the CGST Act, wherein the plea for advance ruling is rejected at the threshold stage. The point on which advanced ruling has been sought for by the petitioner is on the following aspects: "Whether supply of services by India Branch of Sutherland Mortgage Services Inc. USA to the customers located outside India shall be liable to GST in the light of the intra company agreement entered into by the said branch with the principal company incorporated in USA." (It appears that Ext.P-1 application and the impugned Ext.P-2 order use the word, "Inter company agreement" and now it appears that it is common ground that the said usage is a misnomer and the correct expression in that regard, in the context of the case of the petitioner should actually be "intra company", as the specific case of the petitioner is that the petitioner is only a branch of the principal com....
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.... otherwise requires,-- (1)... xxx xxx xxx (93) "recipient" of supply of goods or services or both, means-- (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied." So the definition of "recipient" makes it clear that the the recipient is the one who is liable to pay consideration, etc. Further, it is also noted that as per the arrangement, the customers are obliged to make payment to the principal company incorporated in USA based on the invoices of the service and in turn, the corporate head office of the....
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.... (2) Subject to the provisions of Section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply: Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit. Explanation 1.- For the purposes of this Act, where a person has,-- (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. Explanation 2.- A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory." (Emphasis supplied). 9. In the instant case, the specific....
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....e, where-- (i) the supplier of service is located outside India; (ii) the recipient of service is located in India; and (iii) the place of supply of service is in India." 12. Sec. 13 of the IGST Act deals with "Place of supply of services where location of supplier or location of recipient is outside India." Sec. 16 deals with "Zero rated supply". Thereafter, the Advance Ruling Authority has proceeded to observe that the entire issue is intrinsically related to determination of "place of supply" or the service by the petitioner and has noted that in this case, the supplier of services is located in India and the recipient of services is located outside India. Further that as per Sec. 13 of the IGST Act, the liability to pay tax is dependent upon 'place of supply'. 13. Secs.95 to 100 of the CGST Act, 2017 provide as follows: "Sec.95: Definitions.-- In this Chapter, unless the context otherwise requires,-- (a) "advance ruling" means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100, in....
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....that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the said concerned officer. (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided 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 this Act: Provided further that no application shall be rejected under this subsection unless an opportunity of hearing has been given to the applicant: Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. (3) A copy of every order made under sub-section (2) shall be sent to the applicant and to the concerned officer. (4) Where an application is admitted under sub-section (2), the Authority shall, after examining such further material as may be plac....
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.... application of provisions of the CGST Act and the said Section 20 of the IGST Act provides that subject to the provisions of the said Act and the rules made thereunder, the provisions of the CGST Act relating to the matter enumerated thereunder shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under the IGST Act., etc. In that regard, clause (xviii) of Sec. 20 coming under Chapter IX of the IGST Act expressly enumerates "advance ruling" as one of the matters concerned and hence in view of the provisions contained in Sec. 20 (xviii) of the IGST Act, the abovesaid provisions contained in Secs. 97 to 100, etc. of the CGST Act relating to advancing ruling shall mutatis mutandis, apply as far as may be in relation to integrated tax, as they apply in relation to central tax, as if they are enacted under the IGST Act. 15. After appreciating the abovesaid aspects, the Advance Ruling Authority has proceeded to hold that as per the submissions of the petitioner, it is evident that the question raised is whether the supply made by the petitioner would qualify as "export of service" as defined in ....
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....s considered all the relevant aspects of the matter in the correct legal perspective, after taking into account all the relevant facts and they would argue that the crucial issue to be determined in this case, which is in relation to the determination of the issue of place of supply, cannot be the subject matter of advance ruling, as the said issue relating to determination of place of supply, is not covered within the ambit of Sec. 97(2) of the CGST Act and hence the Advance Ruling Authority lacks jurisdiction to decide on the said issue and that the Advance Ruling Authority has rightly refused to answer the query in that regard by passing Ext.P-2 order in terms of Sec. 97(2) of the Act. 18. It is common ground that if an order is passed under Sec. 97(2) of the CGST Act, then the same is not appealable in terms of Sec. 100 of the Act as sub section (1) of Sec. 100 clearly provides that only if the applicant concerned is aggrieved by any advance ruling pronounced under Sec. 98(4) of the Act that the appeal would lie. Since the stand of the Advance Ruling Authority is that it has rendered its decision under Sec. 98(2) of the CGST Act, an order in the nature of Ext.P-2 cannot be t....
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....o pay tax on any goods or services or both" would also come within the ambit of the questions to be raised and decided by the Advance Ruling Authority on which advance ruling could be sought and rendered under the said provisions. Whereas Clauses (a), (b), (c), (d), (f) & (g), ie. the clauses other than clause (e), are in specific "pigeon holes" and the provision as per clause (e) of sub section (2) of Sec. 97 is in wide terms and the Parliament has clearly mandated that the latter issue of determination of liability to pay tax on any goods or services or both, should also be matters on which the applicant concerned could seek advance ruling from the Advance Ruling Authority on which the said authority is obliged to render answers thereto. The Parliament has made the said provision envisaging that in transactions in nature, where India is now a growing economy and has to make its substantial performance in economic growth and development not only domestic investments, but even foreign investments would also be heavily required and that host of tax laws has been subsumed into the overarching umbrella of the goods and sales tax regime introduced by the Parliament and the Parliament w....
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....l aspect of the matter and has taken a very hyper technical view that it does not have jurisdiction for the simple reason that the said issue is not expressly enumerated in Sec. 97(2) of the Act. This Court has no hesitation to hold that the said view taken by the Advance Ruling Authority is legally wrong and faulty and therefore the matter requires interdiction in judicial review in the instant writ proceedings. In that view of the matter, it is ordered that the abovesaid view taken by the Advance Ruling Authority is legally wrong and faulty and is liable to be quashed and accordingly declared and ordered. Consequently, it is ordered that the said rejection order as per Ext.P-2 will stand quashed and Ext.P-1 application will stand remitted to the Advance Ruling Authority concerned for fresh consideration and decision in accordance with law. The Advance Ruling Authority will immediately permit the petitioner to submit any further written submission in the matter with any additional materials. This the petitioner will do within a period of two weeks from the date of receipt of a certified copy of this judgment. Thereafter, the Advance Ruling Authority will immediately give notice of....