Case Law Details
In re AGP City Gas Private Limited (GST AAR Karnataka)
Introduction: This article provides an in-depth analysis of the recent GST Authority for Advance Ruling (AAR) Karnataka ruling regarding statutory levies, focusing on the case of AGP City Gas Private Limited. The AAR’s decision sheds light on the GST applicability to various licenses, approvals, and no-objection certificates, with a specific emphasis on the nature of the application.
Detailed Analysis:
- Background of AGP City Gas: AGP City Gas, a registered Private Limited Company, sought an advance ruling on specific questions related to the GST applicability of statutory levies collected by various government bodies for licenses and approvals.
- Key Questions Raised: The questions covered a range of issues, including statutory levies by PESO, Ministry of Commerce & Industry, Department of Factories, Boilers, Industrial Safety and Health, and Karnataka Fire & Emergency Services Department. The queries sought clarity on liability, exemptions, and applicability of GST.
- Personal Hearing: Advocate Sri Anirudha R.J.Nayak represented AGP City Gas during the personal hearing on April 13, 2023, reiterating the facts presented in their application.
- Findings & Discussion: The AAR clarified the jurisdictional limitations for seeking advance rulings. It emphasized that advance rulings cannot be given for completed supplies on which self-assessed tax has already been discharged. The ruling highlighted the discrepancy in AGP City Gas’s application, as it pertained to transactions for which GST had already been paid.
Conclusion: The AAR’s rejection of AGP City Gas’s application underscores the importance of understanding the timing and scope of advance rulings. Businesses should seek such rulings for prospective supplies, not for transactions where self-assessed tax has already been discharged. This case serves as a crucial reminder for businesses navigating the complexities of GST on statutory levies.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KARNATAKA
ORDER UNDER SECTION 98(2) OF THE CGST ACT, 2017 & UNDER SECTION 98(2) OF THE KGST ACT, 2017
M/s. AGP City Gas Private Limited, No.123, Sukha Complex, N Block, Kuvempunagar, Mysuru-570023 (hereinafter referred to as ‘The applicant’), having GSTIN 29AASCA5345D1ZG have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
The applicant is a Private Limited Company registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Act, 2017 (hereinafter referred to as the CGST Act and KGST/SGST Act respectively) and is engaged in providing easy access to clean, low-cost and fuel-efficient natural gas to people in India.
3. The applicant has sought advance ruling in respect of the following questions:
1) Whether statutory levies collected by the Petroleum & Explosives Safety Organization (PESO), Ministry of Commerce & Industry, GOI under the Explosives Act, 1884 read with the Gas Cylinder Rules, 2016 and Static & Mobile Pressure Vessels (Unfired) Rules, 2016 for issuance of licence are liable to goods and services tax as per the Central Goods and Services Tax Act, 2017 and rules framed thereunder?
2) If the answer to the above question is in the negative, whether statutory levies collected by the Petroleum & Explosives Safety Organization (PESO), Ministry of Commerce & Industry, GOI under the Explosives Act, 1884 read with the Gas Cylinder Rules, 2016 and Static & Mobile Pressure Vessels (Unfired) Rules, 2016 for issuance of licence are exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 Sl-47 and also Notification No.9/ 2017-Integrated Tax (Rate) dated 28.6.2017 S1-49?
3) Whether statutory levies collected by the Department of Factories, Boilers, Industrial Safety and Health, Government of Karnataka in respect of storage of LNG in the factory under the Factories Act, 1948 and Karnataka Factories Rules, 1969 for issuance of licence are liable to goods and services tax as per the Central Goods and Services Tax Act, 2017 and rules framed thereunder?
4) If the answer to the above question is in the negative, whether statutory levies collected by the Department of Factories, Boilers, Industrial Safety and Health, Government of Karnataka in respect of storage of LNG in the factory under the Factories Act, 1948 and Karnataka Factories Rules, 1969 for issuance of licence are exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 S1-47 and also Notification No.9/ 2017-Integrated Tax (Rate) dated 28.6.2017 S1-49?
5) Whether statutory levies collected by the Karnataka Fire & Emergency Services Department, Government of Karnataka for issuance of a no objection certificate for a building plan approval are liable to goods and services tax as per the Central Goods and Services Tax Act, 2017 and rules framed thereunder?
6) If the answer to the above question is in the negative, whether statutory levies collected by the Karnataka Fire & Emergency Services Department, Government of Karnataka for issuance of a no objection certificate for a building plan approval are exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 Sl-47 and also Notification No.9/ 2017-Integrated Tax (Rate) dated 28.6.2017 S1-49?
7) Whether Registration fee or Stamp Duty collected by the Government of Karnataka in respect of registration of lease agreements for periods exceeding 11 months under Registration Act, 1908 are liable to goods and services tax as per the Central Goods and Services Tax Act, 2017 and rules framed thereunder?
8) If the answer to the above question is in the negative, whether Registration fee or Stamp Duty collected by the Government of Karnataka in respect of registration of agreements under Registration Act, 1908 are exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 Sl-47 and also Notification No.9/ 2017-Integrated Tax (Rate) dated 28.6.2017Sl-49?
9) Whether in the facts and circumstances of this applicant’s case obtaining of all the above licenses, permissions, sanctions, no-objections issued by the Central Government / Union Territory or local authority, qualify as a supply of service in terms of section 7 of the GSTA?
PERSONAL HEARING / PROCEEDINGS HELD ON 13.04.2023
4. Sri Anirudha R.J.Nayak, Advocate and Duly Authorised Representative appeared for personal hearing proceedings held on 13.04.2023 and reiterated the facts narrated in their application.
FINDINGS & DISCUSSION
5. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act.
6. We have considered the submissions made by the applicant in their application for advance ruling. We have also considered the issues involved on which advance ruling is sought by the applicant and the relevant facts along with the arguments made by their authorized representative and also their submissions made during the time of hearing.
7. The Applicant has sought Advance Ruling in respect of questions mentioned in para 3 supra. We proceed to examine the maintainability of the Application before going to the merits of the case.
8. The Applicant states that he is engaged in providing easy access to clean, low-cost and fuel-efficient natural gas to people in India; that they own and operate LNG/natural gas infrastructure at multiple regions across the country and in order to successfully provide al gas across the country, they have obtained required licenses, approvals and no-objection certificates from concerned authorities after payment of all the statutory levies. The Applicant states that they have made payment of Rs. 2,49,660 towards GST under reverse charge mechanism on 18.11.2022 in respect of all the statutory levies charged by the Central Government/ State Government/ Muncipality/ Panchayat for providing licenses, approvals and no-objection certificates to the Applicant. But this Application was filed on 03.04.2023 to know about the applicability of GST on the statutory levies on which the Applicant has already discharged GST under RCM. Thus the maintainability of the Application needs to be examined.
9. In this regard we observe that Section 95(a) of the CGST Act 2017, while defining the term ‘advance ruling’, stipulates that an applicant can seek advance ruling on the questions specified under Section 97(2) of the CGST Act 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant.
10. It is pertinent to mention here that the word “being” is the present participle of the verb “be” and used to form tenses in the progressive (or continuous) aspect. A present participle is a verb form (or verbal) made by adding to the base that often functions as an adjective. Use of present participle denotes present and continuing action. Thus the phrase ‘being undertaken’ refers to an ongoing and continuous supply.
11. In the instant case, the questions, on which the applicant seeks advance ruling, are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant, but in relation to a completed supply on which self-assessed tax is discharged by the applicant. Therefore, the instant application is beyond the jurisdiction of this authority and hence is liable for rejection.
12. In view of the above, we pass the following
RULING
The application filed by the Applicant for advance ruling is rejected, in terms of Section 98(2) of the CGST Act 2017.
