In re Bookwater Tech Private Limited (GST AAR Tamilnadu)
Questions Raised
1. Supply of raw water falls under exempt goods under GST. Does raw water that is supplied through tankers through the Bookwater platform come under exempted goods as well?
2. Does the supplier of water through tankers come under supply of raw water or under transport services?
3. Does Bookwater have to withhold any tax-GST TCS 1% from the suppliers before making payments for the supply of raw water through our platform?
4. Is the supplier making raw water sale is required to register under GST since they are transacting through an e commerce operator?
5. Does Sewage Evacuation come under 18% GST? If yes, most individual sewage tanker operators have turnover less than 20lakhs per annum. Since we are not billing the customer directly and are only billing on behalf of the supplier, will the exemption limit of Rs.20Lakhs per annum be applicable to suppliers individually?
6. Consequently, is GST Registration applicable for all suppliers through the Bookwater platform or only applicable for those suppliers who have a turnover over 20Lakhs?
7. Does Bookwater have to withhold any tax (GST TCS 1% applicability) from the suppliers before making payments since the supplies have been made through our digital platform and we also deduct our charges for our services rendered before making payments?
Held by AAR
In the case at hand, the applicant collects an ‘amount’ at the specified rate under Section 52 of the Act and the said amount is not a ‘Tax’ levied under Section 9 of the GST Act, the determination of the liability is covered under 97(2) (e). The applicant in their application has stated that they do not undertake supply of Raw water or the service of Sewage evacuation service. Thus it is clear that the. questions raised by the applicant, except for Q. No. 3 & 7, is not in relation to the supply of g00ds services being undertaken or proposed to be undertaken by him. In this connection, we would also like to refer to the ruling of the TNAAAR, in the case of M/s. Erode Infrastructure, wherein, the Appellate authority, while considering the admissibility of the application, has stated as under:
14. The provisions of S. 103 categorically states that the ruling binding only On the applicant. It automatically flows that if a recipient obtains a ruling on the taxability of his inward supply of goods or services. the supplier of such goods or services is not bound by that ruling and he is jive to assess the supply according to his Own determination, in which case, the ruling relevance and applicability even. Any law provision has to be interpreted in a constructive and harmonious way keeping in mind the object of the purpose of the provision. All parts of it should be read in aid of and not in derogation of that purpose. Any interpretation, if it defeats the very purpose of the purpose of law low provision, is not only incorrect but also improper and bad in law…’.
Thus the applicant, who is an e commerce operator, and not the ‘supplier’ of Raw water and Sewage Evacuation Services, the question raised on the classification of supply, applicability of Notification for such suppliers, is not the question on supplies being or proposed to be undertaken by him. Therefore, we do not have any hesitation, to hold that the questions raised (except Q. No. 3 &, 7), do not pertain to the supply of the applicant and are not admissible for ruling as per Section 95(a)/103 read with Section 97(2) of the Act.
In respect to Q. No.3 & 7, the applicant has sought ruling as to whether the applicant is to withhold TCS from the suppliers before making Payments to the ‘Concerned suppliers’. Section 52 of the Act governs the collection of amount by e commerce operator in respect of supplies made through Such –e-Commerce. The ambit of Advance Ruling do not provide for answering the questions raised on provisions relating to ‘Tax Collected at Source’ provided under Section 52 of the Act. Further the amount collected as TCS is not in the nature of ‘Tax’ as stated above. Therefore, we hold that these questions are also not covered under the ambit of this authority as per Section 97(2) of the Act.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
Note: Any appeal against the. Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chcnnai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
BOOKWATER TECH PRIVATE LIMITED, Plot No.2, Ajantha Building, Vandalur, Kelambakkam Road, Kelambakkam, Kanchipuram, Tamilnadu 603103 (hereinafter called the Applicant) arc registered under (GST with GSTIN 33AMCB0293LIZL„. The applicant has sought Advance Ruling on the following questions:
1. Supply of raw water falls under exempt goods under GST. Does raw water that is supplied through tankers through the Bookwater platform come under exempted goods as well?
2. Does the supplier of water through tankers come under supply of raw water or under transport services?
3. Does Bookwater have to withhold any tax-GST TCS 1% from the suppliers’ before making payments for the supply of raw water through our platform?
4. Is the supplier making raw water sale is required to register under GST since they are transacting through an c commerce operator?
5. Does Sewage Evacuation come under 18% GST? If yes, most individual sewage tanker operators have turnover less than 20Iakhs per annum. Since we are not billing the customer directly and are Only billing on behalf of the supplier, will the exemption limit of Rs.201,aldis per annum he applicable to suppliers individually?
6. Consequently, is GST Registration applicable for all suppliers through. the 13ookwater platform or only applicable for those suppliers who have a turnover over 20Lakhs?
7. Does bookwater have to withhold any tax (GST TCS 1% applicability) from the suppliers before making payments since the supplies have been made through our digital platform and we also deduct our charges for our services rendered before making payments?
The Applicant has submitted the copy of application in Form GST ARA 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/ each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The applicant has stated that they arc a DPIIT (Department for Promotion of Industry and Internal Trade) recognized start-up under the start-up India program. ‘Their company is an Internet. of things (loT) company and a platform aggregator of water and sewage tankers. They arc engaged in helping clients book water tankers and sewage evacuation tankers for water supply and sewage services. They arc raising invoices on behalf of suppliers and they do not bill any customer directly. Further, they do not buy or sell water in any way and arc strictly an online service hat helps connect the consumer and supplier. The Business model 1 and 2 viz., Water tanker booking and Sewage evacuation business model is detailed below:
Water Tanker Booking business flow:
