In re Thane Municipal Transport Undertaking (GST AAR Maharashtra)
Maharashtra Authority for Advance Ruling (AAR) has rejected the application filed by Thane Municipal Transport Undertaking (TMTU) seeking a ruling on whether GST exemption under Notification No. 12/2017-Central Tax (Rate) is applicable to the manpower supply and bus rental/hire services received by them. The AAR stated that the questions raised pertain to the tax liability of TMTU’s suppliers, which falls outside the scope of Section 97 of the CGST Act, 2017, governing advance rulings.
TMTU, a transport undertaking of Thane Municipal Corporation, sought clarification on three questions:
- Whether TMTU qualifies as a ‘Local Authority’ under the CGST Act, 2017.
- Whether Entry No. 3 of Notification No. 12/2017 (exemption for pure services to government/local authority related to Panchayat/Municipality functions) is applicable to manpower supply services received by TMTU (hiring of drivers and conductors).
- Whether Entry No. 3 of the same notification is applicable to bus (electric or non-electric) rental/hire services received by TMTU.
The AAR, in its observations and findings, addressed each point:
-
Question 1 (Local Authority Status): The AAR noted that the question of whether the applicant qualifies as a ‘Local Authority’ is not squarely covered under Section 97(2) of the MGST Act, 2017, which specifies the permissible questions for advance rulings.
-
Questions 2 & 3 (Applicability of Exemption Notification to Suppliers): The AAR emphasized that Section 97 allows an applicant to seek a ruling on issues affecting their own tax liability. Clause (b) of Section 97(2) refers to the applicability of a notification to the applicant. In this case, TMTU was seeking to determine the applicability of the exemption notification to their suppliers of manpower and bus rental services. The AAR held that this is outside the scope of Section 97.
Furthermore, the AAR cited Section 103(1), which states that an advance ruling is binding only on the applicant and the concerned officer with respect to the applicant. A ruling on the taxability of TMTU’s suppliers would not be binding on those suppliers. The AAR also pointed out that Section 100 allows appeals against advance rulings only by the applicant, the concerned officer, or the jurisdictional officer. Suppliers affected by a ruling on their tax liability obtained by TMTU would not have the right to appeal.
Considering these legal provisions, the AAR concluded that the GST Act does not permit a ruling on the taxability of transactions made by persons other than the applicant. Therefore, the application filed by TMTU, concerning the tax liability of its manpower and bus rental/hire service providers, was not admitted and not answered.
DER OF AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
