TaxTMI 
TaxTMI 
2023 (1) TMI 1092
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....st the Advance Ruling No. GST-ARA-93/2019-20/B-110, dated 10.12.2021 pronounced by the Maharashtra Authority for Advance Ruling (MAAR). BRIEF FACTS OF THE CASE 3.1 The Appellant is a private limited company incorporated in India and registered Companies Act, 1956. The Appellant has obtained GST registration, having GSTIN: 27AAACK4896K1ZZ, for its office situated at Unit no. 2, SDF-I, SEEPZ-SEZ, Andheri East, Mumbai. Maharashtra-400096. 3.2 The Appellant are inter alia engaged in manufacturing of customized motors in India. As the Appellant is an SEZ Unit, it is engaged in exports of the manufactured goods outside India. 3.3 The Appellant procures Rental Services from "Santacruz Electronics Export Processing Zone" (hereinafter referred to as "SEEPZ") SEZ Authority, situated at SEEPZ service centre building, Andheri East, Mumbai-400096, which is a Local authority having GSTIN 27AAALS4995G1ZH. Additionally, other services like Advocate Services and Gate Pass Services from SEEPZ are being procured wherein GST is presently being discharged by the Appellant under the Reverse Charge Mechanism. 3.4 As per the Notification No. 18/2017 - Integrated Tax (Rate) dated 05.07.2017,....
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....hereafter, personal hearing with regard to the application was held by the MAAR on 03.03.2020. wherein the Appellant inter alia made the following submissions:- (a) A conjoint reading of Section 16 of IGST Act, 2017 along with FAQ's issued by the Central Board of Indirect Taxes & Customs, make it clear that a supply to SEZ will be considered as an inter-state supply and as long as the same supply is used for authorized operations of the SEZ, the same will be zero-rated. The Default List of Services approved by the Department of Commerce (F. No. D.12/19/2013-SEZ dated 02.01.2018) for authorized operations specifically includes Renting of Immovable Property within its ambit. (b) Reliance was also placed on GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS 2019 (8) TMI 748, wherein it was held that as long as the services are used for authorized operations of the SEZ unit, the same should be exempted from the levy of tax. (c) The SEZ Act has an overriding effect and will prevail over any other provisions which may be inconsistent with the provisions of the SEZ Act. 5. In light of the above submissions, the MAAR, vide its o....
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.... 3. The Notification No. 10/2017-I T. (Rate) dated 28.06.2017 as amended specifically covers Renting of Immovable Property Service, hence cannot be treated as a general notification. Further Section 16(2) itself says credit of input tax may be availed for making zero rated supplies. Also, Section 16(3) does not apply to the Appellant being a recipient. Thus, by virtue of Section 5(3) of IGST Act r/w the relevant notifications and Section 16 of IGST Act, the Appellant is liable to discharge tax under RCM. Further Section 26 of the SEZ Act 2005 has not yet been aligned with CGST or IGST Act and list of taxes under the said section does not cover CGST/IGST/SGST, therefore the same cannot be applied. The case laws relied upon are not applicable as the same pertain to service tax matters. 6.9-6.12 4. The question w.r.t liability in respect of other services, the question is general and cannot be answered in absence of any information. The communication issued by Ministry of Finance vide letter dated 18.12.2017 relied upon by the Appellant is not a circular per se. and as such, not binding. 6.16-6.21 8. Being aggrieved by the impugned order, the Appellant has filed the....
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....re not required to make cash payment under reverse charge but receive supplies on the basis of an LUT at its option. 13. In regards to the above, the appellant have cited Section 2 (o) of SEZ Act 2005;- "import" means,- (i) bringing goods or receiving services, in a Special Economic Zone, by a Unit or Developer from a place outside India by land, sea or air or by any other mode, whether physical or otherwise; or (ii) receiving goods, or services by a Unit or Developer from another Unit or Developer of the same Special Economic Zone or a different Special Economic Zone: 14. The impugned order has referred the Appellant as an Exclusive Economic Zone unit covered under the term India as defined under Section 2(56) of CGST Act and concluded that since both the supplier and the recipient of service are located in India, therefore, Notification 18/2017 - Integrated Tax (Rate) dated 05.07.2017 is not applicable. In this regards, the Appellant is an SEZ and not an EEZ. As according to UN Convention 1982, an EEZ is an area of the sea in which a sovereign state has special rights regarding the exploration and use of marine resources. However, an SEZ is a spec....
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....re permitted under Goods and Services Tax laws or Central Excise law, or as duty or tax paid goods under claim of rebate, on the cover of documents laid down under the relevant Central Excise law for the purpose of export by a manufacturer or supplier. 18. In light of the above, the Appellant is entitled to receive the supplies from DTA either under LUT or on payment under reverse charge in terms of Section 16 of the IGST Act 2017. 19. Therefore, on a combined reading of the SEZ Act and the Rules as aforesaid, the "reverse charge" notifications cannot have any application in this case. Also, the reverse charge notifications were issued prior to the amendment to the SEZ Rules which has in order to align the same with GST Laws with effect from 19.09.2018. 20. To further add the over-riding effect of the SEZ Act and Rules have been upheld by Courts and Tribunal in the following judgement/order: 21. The Appellant relies on the judgment in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS (2019 (8) TMI 748) cited in support of the contention that the SEZ Act - Section 51 has overriding effect. 22. The reliance has also been placed upon the cas....
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....tion of certain issue. The said communication is self-explanatory". 29. So, the Communication Letter issued by Ministry of Finance vide F. No 334/335/2017-TRU dated 18.12.2017 is valid / genuine and issued by the aforesaid authority on request for clarification on RCM applicability issue. 30. Applicant would like to submit that in case any clarification / judgement is issued by board /competent authorities and if facts are similar in other case then such clarification /judgement should be followed consistently and in accordance with binding judgements / clarifications rendered by competent Board or Courts or Tribunals. In context to above, Appellant relied on the judgment of Hon'ble Gujarat High Court in case of Darshan Boardlam Ltd vs. Union of India. 31. Further, the Appellant place reliance on Hon'ble Delhi High Court judgement issued in case of Interglobe Aviation Ltd Vs. Union of India and ANR. 32. It is a settled position of law that the department cannot take contradictory stand on the same facts and issue in different proceedings. For this submission appellant relied on the following decisions;- • Damodar J. Malpani vs. CCE: 2002 (146) ELT 4....
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....e required to pay any GST on the receipt of impugned services. RESPONDENT'S SUBMISSION 35. The jurisdictional officer have filed their reply dated 15.12.2022, wherein they have submitted as under: 35.1 Since, in the instant case, all the conditions laid down under Notification No. 13/2017-C.T. (R) dated 28.06.2017 as amended by the Notification No. 03/2018- C.T. (R) dated 25.01.2018. and the Notification No. 10/2017-I.T. (R) dated 28.06.2017 as amended by Notification No. 03/2018- I.T. (R) dated 25.01.2018 are squarely satisfied, the Appellant, being registered under the CGST Act, 2017, are liable to pay GST under RCM on the impugned transaction, i.e., supply of services of renting of immovable property by SEZ authority to them. 35.2 As regards the Circular No. 48/22/2018-GST dated 14.06.2018 cited by the Appellant, it is submitted that the aforesaid Circular deals with the types of supply as to whether a supply is to construed as inter-state or intra-state, and therefore, the said Circular is not applicable in the present case as the present case deals with the applicability of GST on the impugned services. 35.3 As regards the applicability of the provisions of ....
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....re liable to pay IGST on the impugned services, i.e., services of renting of immovable property, under RCM in accordance with the Notification No. 10/2017-I.T. (Rate) dated 28.06.2017 as amended by the Notification No. 03/2018-I.T. (Rate) dated 25.01.2018. As regards question regarding the applicability of GST on any other services received by the Appellant from the suppliers located in DTA. the MAAR has held that since the Appellant has not specified the services being procured from DTA suppliers, the said question regarding applicability of GST thereon cannot be answered. The MAAR in the impugned order has inter alia observed that SEEPZ SEZ is a SEZ developer, and hence section 16(3) of the IGST Act. 2017 will not be applicable to the Appellant as the impugned supply of renting of immovable property services are taking place between the SEZ developer and SEZ unit, and not between a supplier located in DTA and SEZ unit as contemplate in the above provisions of section 16(3) ibid. 37. On perusal of the impugned Advance Ruling Order vis- a- vis the submissions made by the Appellant in defence of their case, the moot issues before us are as under:- (i) Whether the impugne....
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....er the supplier supplying the services is located in DTA or in SEZ area. As long as the supply is being made to SEZ developer or SEZ unit for carrying out the authorised operation in SEZ, the same will be treated as zero-rated supply, and will not be subject to GST. Therefore, it will not matter in the present case that the impugned services of renting of immovable property is being provided by the SEZ developer, i.e. SEEPZ SEZ to the Appellant, and not by a supplier located in DTA as observed by the MAAR in the impugned ruling while holding that the provisions of section 16(1) ibid, will not be applicable in the Appellant's case as the impugned services of renting of immovable property is not being provided by the supplier located in DTA rather the same is being supplied by the SEZ developer, i.e., SEEPZ SEZ, hence the facility of LUT is not available to the Appellant as proposed by them. Thus, the contention put forth by the Respondent that the said services are being supplied by the SEZ developer, and not be supplier located in DTA does not hold water, and hence not sustainable. 40. From the provisions of section 16 (1) and Section 5 (3) of IGST Act it is clear that the i....