No Advance Ruling When the Applicant is Just the Recipient and Not the Supplier

No Advance Ruling When the Applicant is Just the Recipient and Not the Supplier

Meetu Kumari | Jun 11, 2022 | Views 5556

No Advance Ruling When the Applicant is Just the Recipient and Not the Supplier

No Advance Ruling When the Applicant is Just the Recipient and Not the Supplier

M/s. Gurunanak Romell LLP has undertook Certain Residential Real Estate Projects (RREP) primarily having residential apartments with a carpet area upto 60 sq. mts. The Applicant wants to know whether Entry No. 3(v) (da) of Notification J J/2OJ 7-CA (Pole), as amended from time to time, applies to the ’works contract service’ received from its contractors.

As per the applicant, in the impugned project, more than 50% of Floor Space Index (FSI) is utilized towards the construction of units (below 60 sq. mts.) and thus, the Project would qualify as an ‘Affordable Housing Project’ (AHP) which has been given ‘Infrastructure Status’ issued by Department of Economic placing reliance on certain rulings and submitted that concessional rate of GST will also be applicable, to the extent of area attributable to the affordable units for services from contractors and even for amenities.

In applicant has submitted that, the word ’in relation to the supply of goods or services or both’ under Section 95(a) of CGST Act. 2017, can be interpreted to include both inward and outward supple. However, the recipient only is paying the tax and the supplier merely collecting the tax from recipient and paying to the Government, as an agent for the recipient. Further, in the definition of Advance Ruling, the word mentioned as supply of goods or services or both, not as a supplier of goods or services or both means, both the inward supplier (that is recipient) and outward supplier (that is supplier).

“95. 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 relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; It is the supplier who is expected to ask the questions by way of filing of the Advance Ruling application. In the present case, both the questions asked are such that in these transactions, the applicant is the recipient and not the supplier. In the first question it is asked whether particular provisions of notification apply in respect of services received from contractor, here, the contractor is the service provider and applicant is the recipient of service. In second question the applicant wants to ask whether service contractor, who provides services in relation to construction of common amenities such as club house, swimming pool and amenities of like nature, whether on such supplies made by such contractor benefits of said provisions of said notification shall be available to such contractor. So, in both the questions nature of transactions is such that the applicant is the recipient and not the supplier.”

Therefore, the authority held that the applicant cannot seek an advance ruling in relation to the supply where it is a recipient of services and hence, contentions of applicant are not admissible. Since the applicant is a recipient of services in respect of supplies, no ruling could be given relating to the two questions, the application was disposed of.

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