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Meetu Kumari | Aug 29, 2022 | Views 29657

Ruling issued not binding on the Supplier of Service as per S. 95(a) and 103(1) of CGST Act

Ruling issued not binding on the Supplier of Service as per S. 95(a) and 103(1) of CGST Act

M/s. Surat Smart City Development awarded a Comprehensive Contract to NEC technology India Pvt. Ltd. for design, development, implementation, maintenance and management of open loop solution based Automatic Fare Collection (AFC) System for Bus Rapid Transit System (BRTS) and City Bus Operation in Surat City. The scope of work under the proposed contract would comprise of setting up of AFC System; and Operation, management and maintenance of the AFC system by NEC.

The GAAR was asked to decide on the nature of supply made by NEC under the AFC project and GST rate to be charged, the classification of supply made by NEC under 8470 or SAC 9954, and the maintenance and management services post service as composite supply under Section 2(30) of the CGST Act, 2017 and the eligibility for exemption under Notification No. 12/2017-CT (rate) in case value of supply of goods constitutes not more than 25% of the value of the said composite supply.

GAAR referred to Section 103(1) CGST Act, which stipulates that Advance Ruling shall be binding only on the applicant who had sought it and on the concerned officer/jurisdictional officer in respect of the applicant. NEC Technologies Pvt. Ltd. is the supplier of service and the Ruling by GAAR won’t be binding on the supplier of service.

It was found that SSDCL is not the supplier of service to seek the Service Code (Tariff)/GST Rate/ nature of service supplied by NEC Technologies Pvt. Ltd. In the Contract submitted before the authority, it was found that the Advance Ruling was sought by SSDCL to determine the SAC, and GST Tax rate liability supplied by NEC Technologies Pvt. Ltd. to SSDClL. Therefore, the application was non-maintainable as per Section 95(a) CGST Act. The authority found that any Ruling issued will not be binding on the Supplier of Service M/s NEC Technologies Pvt. Ltd., a Delhi registered person who has to raise an invoice in this case with details of Service description and GST tax rate in the invoices raised by it. Thereby the Issuance of Ruling, in this case, would frustrate Section 103(1) CGST Act. Thus, the application was rejected in pursuance to Section 95(a) and Section 103(1) CGST Act as SSDCL has no locus standi in the matter.

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