In re Tamil Nadu Nurses and Midwives Council (GST AAR Tamil Nadu)
Introduction: The issue at hand revolves around the Tamil Nadu Nurses and Midwives Council’s query concerning the applicability of GST on various fees they collect. The crux of the issue is whether an application for an advance ruling can be accepted while proceedings against the applicant are ongoing.
Analysis of the Situation:
- Application Details: The Council applied for an advance ruling on whether they were liable to pay tax on their service as per Section 97(2)(e) of the GST Act, 2017. This seeks to determine the tax implications of the fees they collect from institutions and students under the Council’s regulatory purview.
- Pending Investigation by DGGI: While evaluating the application, it was revealed that the questions raised in the advance ruling application were under investigation by the Directorate General of Goods and Services Tax Intelligence (DGGI). As a result, the Authority may not admit the application.
- Regulatory Status of the Applicant: The Tamil Nadu Nurses and Midwives Council operates as a regulatory body under state-administered legislation. They derive their income from various fees from institutions and students who fall under their regulatory guidelines.
- Admissibility Concerns: The key issue is the admissibility of the application in light of the ongoing DGGI investigation. Before determining the tax implications, it is essential to address the application’s validity.
- Defining ‘Proceedings’: The term ‘proceedings’ isn’t explicitly defined in the CGST Act. However, it’s used in multiple sections of the Act. The applicant tried to distinguish ‘proceedings’ from an enquiry/summons, but this distinction isn’t clear-cut and might vary based on context.
- Precedence on the Issue: The Andhra Pradesh High Court previously ruled that applications for advance rulings aren’t admissible if proceedings on the same issue started before the application filing. This acts as a potential precedent in the current scenario.
- The Applicant’s Stance: The Council argues that not disclosing the enquiry or summons under Section 70 of the CGST Act as ‘proceedings’ doesn’t equate to suppression. They believe they’re entitled to an advance ruling.
- Outcome Based on DGGI’s Information: Information from DGGI suggests an ongoing investigation against the Council, with tax implications to the tune of Rs.474 lakhs. This was ascertained after statements from the Council’s Registrar, which indicates proceedings were indeed pending at the application’s time.
Conclusion: Taking all the evidence and regulatory guidelines into account, the advance ruling application by the Tamil Nadu Nurses and Midwives Council has been rejected due to ongoing proceedings against them, falling in line with the first proviso to Section 98(2) of the GST Act. This reinforces the importance of ensuring no active proceedings or investigations are underway before seeking an advance ruling on tax matters.
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