Case Law Details
In re Geeta Rani Mohanty (GST AAR Odisha)
In the case of Geeta Rani Mohanty (GST AAR Odisha), the applicant, M/s. Geeta Rani Mohanty, filed an application for advance ruling under Section 97 of the CGST Act, 2017 and Section 97 of the Odisha GST Act, 2017. The applicant, engaged in the mining and supply of iron ore with its principal place of business in Barbil, Odisha, sought clarification on the GST implications regarding the stamp duty and registration fees paid for registering a lease deed related to mining activities.
The applicant raised three specific questions:
- Whether GST is leviable on the stamp duty and registration fee paid for registering a lease deed.
- Whether the nil rate of tax under Serial No. 47 of exemption notification 12/2017-CT applies to the stamp duty and registration fee paid for registering a mining lease deed.
- Whether the stamp duty and registration fee should be considered as consideration for a mining lease service.
The application was filed amidst ongoing proceedings initiated by the Audit Commissionerate, CGST Bhubaneswar, which had issued an audit observation demanding GST payment under reverse charge mechanism on the amount paid as stamp duty and registration fees. The applicant contested this demand, arguing that GST imposition on stamp duty would lead to a cascading tax effect, contrary to basic taxation principles. They also cited exemption notifications that they believed rendered the government services provided for registration exempt from GST.
During the proceedings, the applicant participated in a personal hearing, reiterating their arguments and submitting additional written statements. However, the Revenue did not submit any comments or participate in the hearing.
After a subsequent personal hearing due to the appointment of a new State GST member, the Odisha GST Authority for Advance Ruling examined the case. They noted that the audit proceedings initiated by the Audit Commissionerate were already addressing the same issue raised in the advance ruling application. According to Section 98(2) of the CGST Act, 2017, an advance ruling application cannot be admitted if the same question is pending or decided in other proceedings under the Act. Therefore, the authority concluded that the applicant’s advance ruling application was not maintainable under the law and rejected it.
The ruling specified that the applicant could appeal this decision to the Odisha State Appellate Authority for Advance Ruling within 30 days if they were aggrieved by the ruling.
In summary, the case of Geeta Rani Mohanty illustrates the procedural aspect where an advance ruling application was rejected because the issue was already under consideration in audit proceedings initiated by the GST authorities.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, ODISHA
M/s. Geeta Rani Mohanty (herein after referred to as the ‘Applicant’) having principal place of business/registered office/corresponding address at Ground Floor, Station Road, Barbil, Keonjhar- 758035 bearing GSTIN 21AADFG1692D2ZW has filed an application for advance ruling under Section 97 of CGST Act, 2017 and Section 97 of the OUST Act, 2017 in FORM GST ARA-01 discharging fee of Rs. 5,000/- each under the CGST Act and the SGST Act.
1.0 The Applicant has sought ruling in respect of the following questions:
“(i) whether the GST is leviable on stamp duty 86 registration fee paid for the purpose of a registering lease deed with registering authority.
(ii) Whether the nil rate of tax under Si. No. 47 of the exemption notification 12/2017-CT dtd. 28.06.2017 is applicable to stamp duty & registration fee paid by the applicant for registering their mining lease deed.
(iii) Whether the stamp duty and registration fee should be treated as consideration for mining lease service, when those are actually paid for receiving service of the Government for registration of a conveyance/lease deed.”
1.1 At the outset, we would like to make it clear that the provisions of both the COST Act and the OUST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OUST Act.
2.0 Submission of the Applicant
2.1 The Applicant is a registered person under the provisions of CGST/OGST Act, 2017 having CSTIN: 21AADITG1692D2ZW. The Applicant is engaged in the business of “Mining and supply” of Iron Ore. For the purpose of obtaining the mining lease the Applicant has paid the stamp duty including registration fees to register their conveyance /lease deed with the registering authority of the Government of Odisha.
2.2 Under Audit Observation No. 6 dated 10.11.2023 issued by the Asst. Commissioner of Audit, Angul Circle Gr.-1, COST Bhubaneswar, the Applicant has been issued with a demand of Rs 6,27,74,106/- to be paid on reverse charge basis against the amount deposited as stamp duty & registration fees for the registering of Conveyance/Lease Deed. Towards this audit observation, it has been submitted that GST on stamp duty would amount to tax on tax which is against the basic principle of taxation and would result in cascading effect. Further, stamp duty is a statutory duty as per Indian Stamp Act, 1899. The duties are levied, collected and appropriated by the respective State Government. It has also been submitted that according to the Si. No. 47 or exemption notification 12/2017-CT dtd. 28.06.2017, the service provided by the Central Government, State/UT Government or Local Authority, by way of registration required under any law for the time being in force, attracts nil rate of tax. Both the registration fee & stamp duty are pre-condition for registering the lease deed and the service provided by the Government are exempted by virtue of the notification mentioned supra.
3.0 The personal hearing was fixed on 05.02.2024 under due intimation to the Applicant, the jurisdictional officer of State GST & jurisdictional officer of Central GST (intimated through their respective Commissionerates along with a copy of the application and the written submission of the Appliepnt) The Applicant through its representative Mr Pramod Kumar Jena appeared for personal hearing. Mr Jena re-iterated the submission already furnished in. the application filed for advance ruling. Further, Mr Jena has submitted a fresh written submission during the time of personal hearing and requested to decide the issue accordingly. The Revenue has neither submitted its comments nor appeared for personal hearing.
3.1 Consequent upon appointment of New SGST Member vide Government of Odisha Notification No.9739-FIN-CTI-TAX-0072/ 2017 dated 06.04.2024 communicated under Letter C.No.CCT-PEI-POL-0079-2021/5015/CT&GST dated 10.04.2024, a fresh personal hearing was conducted on 23.04.2024. The Applicant through its representative Mr Pramod Kumar Jena appeared for personal hearing. During P.H., Mr Jena has submitted a fresh written submission .
Discussion & findings
4.0 We have gone through the Advance Ruling application, questions on which advance ruling is sought and the Applicant’s interpretation of law and/or facts, as the case may be, in respect of the questions asked.
4.1 On examination of Advance Ruling application and the submission filed by the Applicant, it is noticed that Asst. Commissioner of Audit, Angul Circle Gr.-1, CGST Bhubaneswar has issued Audit Observation No 6 dated 10.11.2023 to the Applicant for recovery of Rs.6,27,74,106/- (CGST Rs 3,13,87,053/- T SGST Rs 3,13,87,053) towards GST on RCM on the amount paid towards Stamp duty and Registration fees. Pursuant to the said audit observation, the Applicant has sought ruling . Further, it is also seen that the Applicant has been issued GST DRC-01A by the Addl. Commissioner, Audit Commissionerate vide C. No. GADT/ CnG/ ADT/ GST/ 2791/ 2023-GR-1-CGST-ADT CIR-AN GL- ADT-2941 A dated 23.02.2024 for payment of GST on the aforesaid amount. It would be pertinent to mention here that the proviso to sub Section (2) of Section 98 of the CGST Act, 2017 provides 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”.
4.2 In the instant case, the Applicant i.e. M/s Geeta Rani Mohanty, Barbil, appears to have fallen under the first proviso to Section 98(2) of the CGST Act, 2017, by opting for advance ruling at this stage particularly when the subject matter is already taken up and pending in proceedings initiated by the Audit Commissionerate, CGST, Bhubaneswar under Section 65 of the CGST Act, 2017 .
RULING
5.0 In view of the discussion made in the foregoing paras (4.0 to 4.2 as above), the application for advance ruling tiled by the Applicant is not maintainable under law and liable for rejection . Hence, the said application is rejected in terms of Section 98(2) of the CGST Act, 2017.
6.0 The Applicant, if aggrieved by the ruling, may appeal to the Odisha State Appellate Authority for advance ruling under Section 100 of the CGST/OGST Act, 2017 within 30 days from the date of receipt of the advance ruling.
