In re MH Ecolife E-Mobility Pvt. Ltd. (GST AAR Maharashtra)
It was noticed at the time of final hearing of original order (dated 22/12/2021) passed in present case that a very similar issue which was involved in the case of M/s. M P Enterprises & Associates Limited, Advance Ruling No. GST-ARA 37/2020-21/B-16, dated 14 June 2021, was decided by this Authority as per the said order dated 14/6/2021. And mainly based on the said decision given in the case of M/s MP Enterprises, the decision in the case of present applicant was taken. It was further noticed that, after the decision in the above mentioned case of M/s M.P. Enterprises, a Circular no. 164/20/2021-GST dated 6/10/2021 was issued by the CBIC, Govt of India in view of Representations having been received seeking clarification regarding eligibility of the service of renting of vehicles to State Transport Undertakings (STUs) and Local Authorities for exemption from GST under Sr. No. 22 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts “services by way of giving on hire (a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or (aa) to a local authority, an Electrically Operate vehicle meant to carry more than twelve passengers”.
The said Circular has clarified that the expression “giving on hire” in SL No. 22 of the Notification No. 12/2017-CT (Rate) includes renting of vehicles. Accordingly, services where the said vehicles are rented or given on hire to State Transport Undertakings or Local Authorities are eligible for the said exemption irrespective of whether such vehicles are run on routes, timings as decided by the State Transport Undertakings or Local Authorities and under effective control of State Transport Undertakings or Local Authorities which determines the rules of operation or plying of vehicles.”
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
1. An application, for Advance Ruling was filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. MH Ecolife E-Mobility Pvt. Ltd., the applicant, seeking an advance ruling in respect of certain questions as discussed in subsequent paras. The application was decided by this office as per Order no. 60/2020-21/B-116 dated 21/12/2021. Later, it was noticed that a circular dated 6/10/2021 remained to be considered while passing the said order and the applicant had not pointed out the said circular at the time of final hearing in respect of the said order passed on 12/12/2021. Therefore, this office served the impugned notice (Notice bearing no. GST/ARA/2021-22/B-19 dated 15th February 2022) on the applicant and the case was fixed for hearing on 15/3/2022. The applicant requested for extension of the hearing date by one more month. Hence, case was fixed for final hearing again on 19/4/2022.
The impugned notice (which is the basis for the present hearing) issued to the applicant, contains all the facts, the relevant legal provisions and the reasons for issue of the said notice, reads as under:
Notice
(Under Section 102 & 104 of the Central Goods and Services Tax Act/Maharashtra Goods and Services Tax Act, 2017)
It is noticed that the Advance Ruling Order was passed on 22/12/2021 as referred to above, in the present case. The said application was filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. MH Ecolife E-Mobility Pvt. Ltd the applicant, seeking an advance ruling in respect of the certain question and as per the said order dated 22/12/2021, answers were given to the said questions asked, as mentioned below.-
Question 1: Whether services provided by the applicant to NMMT under the Agreement, by way of supplying, operating and maintaining air-conditioned electrically operated buses are taxable and subject to GST?
Answer: Answered in the affirmative, as discussed above.
Question 2: If the answer to (i) above is yes, what will be appropriate SAC (Services Accounting Code) for classifying the services provided by the applicant and applicable GST rate thereon ?
Answer: As discussed above, the appropriate SAC (Services Accounting Code) for classifying the services provided by the applicant is Tariff Heading 9966. The rate of GST is 12% (with availment of ITC) or 5% (without availment of ITC), as discussed above.
Question 3: Whether Applicant shall be eligible to avail the input tax credit of tax paid on the procurement of input supplies used in supplying services to NMMT under the Agreement?
Answer: The Applicant shall be eligible to avail the input tax credit of tax paid on the procurement of input supplies used in supplying services to NMMT under the Agreement only if they pay tax @ of 12% on output service, as discussed above.
It was noticed that a very similar issue was involved in the case of M/s. M P Enterprises & Associates Limited, Advance Ruling No. GST-ARA 37/2020-21/B-16, dated 14 June 2021, which is decided by this Authority as per the said order dated 14/6/2021 and mainly based on the said decision given in the case of M/s MP Enterprises, the decision in the case of present applicant is taken. It is mentioned in para 5.5 of the said order dated 22/12/2021 (in the case of present applicant) that “From a perusal of the subject agreement we find that, the facts in the case of M/s M.P. Enterprises & Associates Limited and the present case are identical in nature and terms of underlying contracts are also similar.” So, it was mainly due to the decision in the case of M/s MP Enterprises (cited supra), the decision in the present matter is taken. It is further noticed that after the decision in the case of M/s M.P. Enterprises, a circular no. 164/20/2021-GST dated 6/10/2021 is issued by the CBIC, Govt of India. On page 4, para 8 of the said circular it is mentioned as under:
“8. Renting of vehicles to State Transport Undertakings and Local Authorities
8.1 Representations have been received seeking clarification regarding eligibility of the service of renting of vehicles to State Transport Undertakings (STUs) and Local Authorities for exemption from GST under Notification No. 12/2017-CT (Rate). SI. No. 22 of this notification exempts “services by way of giving on hire (a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or (aa) to a local authority, an Electrically Operate vehicle meant to carry more than twelve passengers”.
8.2 This issue has arisen in the wake of ruling issued by an Authority for Advance Ruling that the entry at SI. No. 22 of notification No. 12/2017-Central Tax (Rate) exempts services by way of giving on hire vehicles to a State Transport Undertaking or a local authority and not renting of vehicles to them. The ruling referred to certain case laws pertaining to erstwhile positive list based service tax regime.
8.3 It is relevant to note in this context that Schedule II of CGST Act, 2017 declares supply of any goods without transfer of title as supply of service even if right to use is transferred. Transfer of right to use has been declared as a supply of service [Schedule II, Entry 5(f) refers]
8.4 The issue was placed before the 45th GST Council Meeting held on 17.09.2021. As recommended by the GST Council, it is clarified that the expression “giving on hire” in SI. No. 22 of the Notification No. 12/2017-CT (Rate) includes renting of vehicles. Accordingly, services where the said vehicles are rented or given on hire to State Transport Undertakings or Local Authorities are eligible for the said exemption irrespective of whether such vehicles are run on routes, timings as decided by the State Transport Undertakings or Local Authorities and under effective control of State Transport Undertakings or Local Authorities which determines the rules of operation or plying of vehicles.”
The hearing in the present case is concluded on 7/12/2021. During the course of hearing, above circular dated 6/10/2021 was not pointed out. It is noticed that decision in the present case is delivered without considering the said circular. It is, therefore, necessary to reconsider the decision given in the present case, particularly in the light of the provisions in the said Trade Circular. This might lead to different answers than the answers already given to the questions asked in the present case. It is, therefore, necessary to given a fresh hearing in the present case. In this respect, the applicant is requested to refer to following provisions of the GST Act.-
“102. The Authority or the Appellate Authority may amend any order passed by it under section 98 or section 101, so as to rectify any error apparent on the face of the record, if such error is noticed by the Authority or the Appellate Authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer, the applicant or the appellant within a period of six months from the date of the order:
Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made unless the applicant or the appellant has been given an opportunity of being heard.”
“104. (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of section 101 has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant or the appellant as if such advance ruling had never been made:
Provided that no order shall be passed under this sub-section unless an opportunity of being heard has been given to the applicant or the appellant. Explanation.-The period beginning with the date of such advance ruling and ending with the date of order under this sub-section shall be excluded while computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant, the concerned officer and the jurisdictional officer.
Thus the applicant and the concerned jurisdiction officer are hereby directed to submit their respective written submissions (on or before the date fixed for hearing) and attend the hearing on the present Notice on 15/03/2022. The applicant is directed to show cause as to why the decision given in the present case dated 22/12/2021 should not be withdrawn. The link for attending the hearing online shall be shared separately.”
2. The hearing, in respect of the impugned notice was conducted on 19/4/2022. The applicant, as well as the Jurisdiction officer filed the detailed submissions in response to said notice. The Authorised representative of the applicant, Shri Niraj Hande, Advocate, Shri Sharad Gupta, Shri Rahul Deep Pandya, DGM, Shri Shatrughna Goswami, DM, were present. Jurisdictional Officer Shri Ganesh Jadhav, Superintendent Divisional III, Commissionerate Belapur was also present. The applicant filed a detailed reply which reads as under:
“Ref: 1) Notice bearing no. GST/ARA/2021-22/B-19 dated 15th February 2022 (“Notice”)
2) Order no. GST-ARA-60/2020-21/B-116 dated 22nd December 2021 of this Hon’ble Maharashtra Authority of Advance Ruling (“Ruling”/ “Order”)
2) Advance Ruling Application no. 60 dated 23 December 2020 filed by M/s. MH Ecolife E-Mobility Pvt. Ltd. (“Application”)
Sub: Response to Notice
We are in receipt of the captioned notice in terms of which we have been asked to show cause as to why the Order dated 22.12.2021 should not be withdrawn, on account of the allegations levelled in the captioned Notice.
Facts & Background:
