In re Anmol Industries Limited (GST AAR West Bengal)
Finally, we proceed to appreciate the issue of admissibility of this application with reference to section 103 of the GST Act and for that purpose, we like to reproduce subsection (1) of section 103 of the GST Act which reads as follows:
“Applicability of advance ruling.—
(1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only—
(a) on the applicant who had sought it in respect of any matter referred to in subsection (2) of section 97 for advance ruling;
(b) on the concerned officer or the jurisdictional officer in respect of the applicant.”
The aforesaid sub-section, thus, categorically speaks that the ruling pronounced is binding only on the applicant and on the concerned officer or the jurisdictional officer in respect of the applicant. The applicant has submitted that the aforesaid section nowhere specifies that the said ruling will be applicable to the supplier or the recipient and hence any person who qualifies to be an applicant can seek an advance ruling on questions as per section 97(2) whether it be acting as a recipient of supply or supplier of the supply of goods or services.
However, if an application is filed by the recipient of goods or services or both on the taxability of his inward supply of goods or services and ruling is pronounced accordingly, such ruling shall be binding only on him and on the concerned officer or the jurisdictional officer of him. In no way, the ruling shall be binding on the supplier of such goods or services.
To illustrate, say Mr A of West Bengal receives inward supply of goods from Mr B (Location of Mr B may be in West Bengal or may be in other states).Mr A files an application for advance ruling seeking the taxability of his inward supply. The Advance Ruling Authority pronounces ruling declaring the supply to be an exempt supply. However, since the same is not binding on his supplier, the supplier may not follow the ruling and even find the supply as a taxable supply. In such a scenario, the ruling loses its relevance and applicability.
Any provisions of the Law, therefore, should not be interpreted in a way which defeats the very purpose of the objective and purpose of the law provision. We are therefore of the view that in the subject application, the applicant cannot seek an advance ruling in relation to the supply where he is a recipient of services.
ULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BENGAL
1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ‗GST Act‘ would mean the CGST Act and the WBGST Act both.
1.2 The applicant submits that he has entered into a leasing agreement with the Shyama Prasad Mookerjee Port, Kolkata (hereinafter referred to as SMPK), a body incorporated under the Ministry of Ports, Shipping and Waterways, Government of India, wherein, the SMPK has agreed to lease a industrial plot of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex. The allotment of the plot has been done vide letter bearing number Lnd. 6063/22/2869 dated 21.09.2022.
1.3 The applicant submits further that as per the allotment letter supra, it has been agreed that the applicant shall pay a sum of Rs. 39,00,11,000/- to the Lessor, SMPK as upfront lease premium. The applicant states that the allotment letter further seeks to charge GST @18% on the above amount also.
1.4 The applicant is of the view that as per entry No. 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017, as amended from time to time, the above upfront lease premium is exempt from GST.
1.5 In the backdrop of aforesaid activities, the applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under raising following question vide serial number 14 of the application in FORM GST ARA-01:
