Case Law Details
In re Yougesh Charan (GST AAR Rajasthan)
Introduction: The article delves into the case of M/s Yougesh Charan, an unregistered individual seeking clarification on the availability of input tax credit for biofuel, fuel oil, or blended biofuel used in providing transportation services. The applicant intended to start a business of supplying transportation services and sought an advance ruling under Section 97(2)(a) of the CGST Act.
Detailed Analysis: The applicant, Yougesh Charan, aimed to register under the CGST Act and RGST Act, with applicable service tax of 12% under the forward charge mechanism. They planned to use “Blended Biofuel/Fuel Oil/Bio Fuel” in vehicles for transporting goods. The vendor charged tax at 18% under HSN 2710. The applicant sought clarity on whether input tax credit for the tax charged on these goods would be available for providing transportation services taxed at 12%.
The application raised questions on the interpretation of the law, specifically concerning the availability of input tax credit on inputs, input services, or capital goods used for supplying transportation services. The applicant preferred an application for advance ruling, seeking clarity on the tax credit for “Blended Bio Fuel/Fuel Oil/Bio Fuel.”
However, the applicant later decided to withdraw the Advance Ruling Application, as per their letter dated 02/08/2023, stating they were no longer pursuing the business for which they sought clarification.
Conclusion: The article concludes that the Authority for Advance Ruling in Rajasthan considered the withdrawal request from Yougesh Charan and, consequently, did not provide a ruling on the initial query. The withdrawal signifies the applicant’s decision to no longer pursue the business, leading to the absence of a definitive ruling on the input tax credit for biofuel used in transportation services.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
The issue raised by M/s YOUGESH CHARAN (Unregisterd), Plot No. C 112 Krishna Nagar Pali Road Basni Phase I, Jodhpur-342005, Rajasthan (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under: –
(d) Admissibility of input tax credit of tax paid or deemed to have been paid
Further, the applicant being a Un-registered person as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling.
A. SUBMISSION AND INTERPRETATION OF THE APPLICANT:
1. M/s. Yougesh Charan (hereinafter referred to as the “applicant”) are Unregistered, the applicant is an individual and is about to start business of supplying services of transportation of goods. The applicant willing to take registration under Central Goods and Services Tax Act, 2017 (hereinafter referred as `CGST Act’) and Rajasthan Goods and Services Tax Act, 2017 (hereinafter referred as `RGST Act’).
2. That, as per the notification no. 11/2017 central tax rate dated 28.06.2017 as amended from time to time, the applicable rate on services provided by the applicant is 12% (entry no 9(iii)(b)) under the forward charge mechanism.
3. That, for providing the services of transportation of goods, the applicant would need to procure “Blended Bio fuel/ Fuel oil/ Bio Fuel” which in turn will be used in the vehicles transporting such goods.
4. That, the applicant has enquired from the vendors of “Blended Bio Fuel/ Fuel Oil/ Bio Fuel” about applicable HSN and tax rate on such goods. The vendors have informed that they supply said goods under HSN 2710 and charge tax at the rate of 18%. As per understanding of the applicant as well the said goods are taxable at the rate of 18% under entry 33 (Heading 2710) of schedule III in notification no. 1/2017 central tax rate dated 28.06.2017.
5. That, since the applicant would supply services of transportation of goods and charge tax at the rate of 12%, as per the understanding of the applicant of the law, there is no provision which restricts input tax credit on inputs, input services or capital goods used for supplying such services. Likewise, the applicant understands that the credit of tax paid to vendor on “Blended Bio Fuel/ Fuel Oil/ Bio Fuel” shall be available to the applicant as charged thereon.
6. That, in order to understand the availability of credit of taxes charged by vendor on “Blended Bio Fuel/ Fuel Oil/ Bio Fuel” the applicant prefers an application of advance ruling in terms of section 97 of CGST Act read with RGST Act.
7. B.QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT:
Whether the input tax credit of tax charged by the supplier on Ho fuel/ fuel oil/ blended biofuel will be available to the applicant, whereby such bio fuel/ fuel oil, blended biofuel shall be used by the applicant in providing the transportation services?
D. WITHDRAWAL OF APPLICATION
The applicant vide their letter dated 02/08/2023 requested to withdraw the Advance Ruling Application filed before the authority,as they are no more pursuing with business for which they were applying for the clarification being an applicant in the name of M/s Yougesh Charan.
E. FINDINGS, ANALYSIS & CONCLUSION:
The Applicant vide their letter dated 02.08.2023 has requested to withdraw the Advance Ruling Application filed before the authority.
Since the applicant has requested for withdrawal of the application therefore, their request to withdraw the application is considered. Hence, no ruling is given.
