Case Law Details
In re Faiveley Transport Rail Technologies India Private Limited (GST AAAR Tamilnadu)
The Authority for Appellate Advance Ruling (AAAR) in Tamil Nadu recently issued a significant order in the case of Faiveley Transport Rail Technologies India Private Limited. This decision revolves around the applicability of GST on specific services and addresses the issue of delayed appeal filing. Here’s a comprehensive look at the details of the ruling and its implications.
Introduction: Faiveley Transport Rail Technologies India Private Limited, a company engaged in manufacturing and exporting equipment for the rolling stock industry, including railway door systems and braking systems, filed an appeal under Section 100(1) of the Tamil Nadu Goods & Services Tax Act 2017/Central Goods & Services Tax Act 2017. The appeal challenged the ruling of the Tamil Nadu State Authority for Advance Ruling (AAR) regarding the applicability of GST on car lease services provided to their employees. Additionally, the appeal sought condonation for the delay in filing the appeal.
Detailed Analysis
1. Background and Appeal Filing: The appeal was filed by Faiveley Transport against the Order No. 125/AAR/2023 dated December 20, 2023. The primary issue was whether GST is applicable on the facility of car leases extended to employees as part of their employment. The AAR had previously ruled that GST is applicable on such services, which Faiveley Transport contested.
2. Grounds for Appeal: Faiveley Transport argued that the car lease provided to employees qualifies as a perquisite under the Income Tax Act, 1962, and should therefore be exempt from GST under Entry 1 of Schedule III of the CGST Act, 2017. This exemption is crucial as it impacts the company’s compliance and financial liabilities under GST.
3. Delay in Filing Appeal: The appeal was filed 27 days beyond the prescribed time limit of 30 days from the date of receipt of the AAR order. The company attributed the delay to the ill health of their authorized representative, Shri Ganesh Kumar, who was responsible for preparing and filing the appeal. During the personal hearing, the representative provided a medical certificate and other documents to substantiate the claim of illness during the critical period.
4. Condonation of Delay: The AAAR scrutinized the reasons for the delay and the provided medical documents. According to Section 100(2) of the CGST Act, 2017, the appellate authority can condone delays up to an additional 30 days if sufficient cause is shown. The AAAR was satisfied that the illness of the authorized representative constituted sufficient cause, thus condoning the 27-day delay and allowing the appeal to be considered on its merits.
5. Key Observations and Findings:
- Compliance with Legal Provisions: The AAAR noted that the appeal was filed within the condonable period allowed under the proviso to Section 100(2) of the CGST Act, 2017.
- Substantiated Delay: The provided medical certificate and related correspondence convinced the authority of the genuine nature of the delay.
Conclusion: The AAAR’s decision to condone the delay in Faiveley Transport’s appeal filing highlights the importance of substantiated and genuine reasons in regulatory compliance matters. By allowing the appeal to be heard on its merits, the AAAR ensures that procedural delays do not override substantive justice. This ruling serves as a reminder for companies to maintain diligent documentation and proactive communication in legal and compliance processes.
For further details, the complete text of the AAAR order is available on the SEBI website under the legal framework section.
Read Order Also: GST & ITC on Employee Services: AAR Tamilnadu Ruling
FULL TEXT OF THE ORDER OF AUTHORITY FOR APPELLATE ADVANCE RULING,TAMILNADU
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 in pari materia and have the same provisions in like matter and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act, 2017 would also mean a. reference to the same provisions under the Tamil Nadu Goods and Service Tax Act, 2017.
2. The subject appeal was filed under Section 100(1) of the Tamil Nadu Goods & Services Tax Act 2017/Central Goods & Services Tax Act 2017 (hereinafter referred to the Act’) by M/s Faiveley Transport Rail Technologies India Private Limited, (hereinafter referred to as ‘Appellant’). The Appellant was registered under the GST Act vide GSTIN 33AAGCS8525B1ZL. The appeal was filed against the Order No.125/AAR/2023 dated 20.12.2023 passed by the Tamil Nadu State Authority for Advance Ruling (hereinafter referred to AAR) on the Application for Advance Ruling filed by the Appellant.
3.1. The Appellant is a Private Limited company under the administrative control of ‘STATE’ and they are engaged in the business of manufacturing, supplying and exporting equipment for the Rolling Stock industry. The said equipment includes, inter alia, railway door systems, grills for train coaches, braking systems and pantographs for railways. The Appellant had applied for Advance Ruling vide application ARA-01 No.3/2023 dated 29.12.2022, with regard to certain queries on applicability of GST and eligibility of ITC, with the AAR who vide Ruling No. 125/AAR/2023 dated 20.12.2023 pronounced the decisions for the respective queries raised by the Appellant.
3.2. Aggrieved over one such decision on the issue relating to the query, viz., “Whether GST is applicable on facility of car extended to the employees of the Applicant-Company in the course of employment”, where the AAR had ruled that GST is applicable on such services, the Appellant has filed the present appeal. Under the grounds of appeal as submitted by the Appellant, they have contended that the facility of car lease provided to the employees under the employment contract will qualify as a perquisite under the Income Tax Act, 1962, and accordingly would be exempt from payment of GST, as it gets covered under Entry 1 of Schedule III of the CGST Act, 2017.
3.3 We observe that in this case, apart from the merits of the case, the appellant had also filed a petition for condonation of delay. Since the filing of appeal by the appellant in the instant case was beyond the prescribed time limit of 30 days from the passing of Order No.125/AAR/2023 dated 20.12.2023, we are of the opinion that this aspect as to whether the delay in filing the appeal could be condoned or not, needs to be ascertained, before proceeding to discuss the merits of the case. Accordingly, an opportunity of personal hearing was accorded to the appellant for the limited purpose of condonation of delay.
PERSONAL HEARING:
4.1 Shri Ganesh Kumar, Chartered Accountant, who is the authorized representative (AR) of the company, appeared for the Personal Hearing on 14.05.2024 in person. The AR reiterated the submissions made by them in the petition for condonation of delay filed with the application.
4.2 Shri Ganesh Kumar further stated that he is the AR concerned, who has been entrusted with the responsibility of preparing and filing the appeal, and since he was not keeping well during the relevant period of time, the appeal could not be filed in time. The members enquired as to whether any documentary evidence relating to the medical condition of the authorized signatory, was attached along with the application. The AR replied that no such document was attached with the application, but that he is producing now, a medical certificate dated 11.05.2024 which states that Shri Ganesh Kumar, Aged 38 was under treatment with Dr.Pramod Kumar Mishra, BHMS (Reg. No.85247), Mumbai, from 05.03.2024 to 15.03.2024. The AR further added that a letter dated 14.03.2024 had also been addressed to the Commissioner of Commercial. Taxes, Chennai in this regard seeking extension of time for filing the appeal. The members conveyed that they would look into the matter and consider the instant case for condonation of delay, accordingly.
DISCUSSION AND FINDINGS:
5.1 We have carefully considered all the material on record, the various submissions made by the Appellant and the applicable statutory provisions. The Appellant is before us, seeking primarily to condone the delay in filing the appeal against the Order No. 125/AAR/ 2023 dated 20.12.2023 passed by AAR.
5.2 The Appellant has stated that they have received the Advance Ruling No.125/ARA/2023 dated 20.12.2023 passed by the AAR through e-mail on 16.02.2024. They have further stated that the appeal could not be filed in time as the authorized representative who has been entrusted with the responsibility of preparing and filing the appeal, was not keeping well during the relevant period of time. It is seen that the appeal was filed on 12.04.2024, after a delay of 27 days. As per Section 100(2) f the CGST Act, 2017, 30 days is the time limit for filing the appeal from the date of receipt of the order.
5.3 We observe that in the instant case, having received the advance ruling on 16.02.2024, the appellant ought to have filed the appeal before the Appellate Authority for Advance Ruling by 16.03.2024 under normal circumstances, as laid down under Section 100(2) of the CGST Act, 2017. However, the proviso to Section 100(2) of CGST Act, 2017, states as follows :-
“Provided that the Appellate Authority may, if it is satisfied that the appellant was prevented bu a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days.”
The appellant having filed the application for appeal on 12.04.2024, we notice that the appeal has been filed after a delay of 27 days, but in any case, we find that the appeal has been filed within the condonable time limit of 30 days, as specified in the proviso referred above.
5.4 The appellant claims that Shri Ganesh Kumar, Chartered Accountant, who is the authorized representative (AR) of the company, has not been keeping well during the relevant period of time, and therefore, the appeal could not be filed in time. Now the aspect as to whether the appellant was prevented by a sufficient cause from presenting the appeal, is required to be determined. From the medical certificate dated 11.05.2024 furnished at the time of personal hearing by Shri Ganesh Kumar, it is seen that he was under treatment owing to health issues from 05.03.2024 to 15.03.2024. Further, a letter dated 14.03.2024 had also been addressed to the Commissioner of Commercial Taxes, Chennai in this regard seeking extension of time for filing the appeal.
5.5 Going by the documents available on record, we are convinced Shri Ganesh Kumar (AR), who has been entrusted with the responsibility of preparing and filing the appeal, was not keeping well during the relevant period of time, i.e., from 05.03.2024 to 15.03.2024. Further, considering the state of affairs at the relevant point of time, the appellant has also sought extension of time for filing the appeal under their letter dated 14.03.2024. This being the case, we feel that the appellant has presented sufficient cause that prevented them from filing the appeal within the normal period. Therefore, we are of the considered opinion that the delay of 27 days beyond the normal time limit in filing the appeal is condonable as provided under the proviso to Section 100(2) of CGST Act, 2017. We further find that this authority is empowered vide Section 101(1) of the CGST/TNGST Acts, 2017 to pass such orders as deemed fit.
6. Accordingly, we pass the following order:
ORDER
The delay in filing the appeal by the appellant beyond the normal time limit of 30 days is condoned in terms of proviso to Section 100(2) of CGST/TNGST Acts, 2017, and the appeal will be taken up for consideration on merits.
