Case Law Details
In re Geeta Rani Mohanty (GST AAR Odisha)
In the case of M/s Geeta Rani Mohanty, the applicant sought an advance ruling from the GST Authority of Advance Ruling (AAR), Odisha, regarding the applicability of GST on stamp duty and registration fees paid for registering a mining lease deed. The applicant questioned whether these payments should attract GST, arguing that stamp duty is a statutory obligation under the Indian Stamp Act, 1899, and should not be subject to GST as it would lead to double taxation. The AAR Odisha examined the application and found that the matter was already under audit by the CGST Bhubaneswar Commissionerate, where a demand for GST payment on the stamp duty and registration fees was issued. Citing Section 98(2) of the CGST Act, 2017, which prohibits admitting an application for an advance ruling if the matter is already pending in any proceeding, the AAR ruled that the application was not maintainable and rejected it. The applicant was advised to appeal to the Odisha State Appellate Authority if dissatisfied with the ruling.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, ODISHA
Subject: M/s. Geeta Rani Mohanty (herein after referred to as the ‘Applicant’) having principal place of business/registered office/corresponding address at Ground Floor, Station Road, Barbil, Keonjhar- 758035 bearing GSTIN 21AADFG1692D2ZW has filed an application for advance ruling under Section 97 of CGST Act, 2017 and Section 97 of the OUST Act, 2017 in FORM GST ARA-01 discharging fee of Rs. 5,000/- each under the CGST Act and the SGST Act.
1.0 The Applicant has sought ruling in respect of the following questions:
“(i) whether the GST is leviable on stamp duty 86 registration fee paid for the purpose of a registering lease deed with registering authority.
(ii) Whether the nil rate of tax under Si. No. 47 of the exemption notification 12/2017-CT dtd. 28.06.2017 is applicable to stamp duty & registration fee paid by the applicant for registering their mining lease deed.
(iii) Whether the stamp duty and registration fee should be treated as consideration for mining lease service, when those are actually paid for receiving service of the Government for registration of a conveyance/lease deed.”
1.1 At the outset, we would like to make it clear that the provisions of both the COST Act and the OUST 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 OUST Act.
2.0 Submission of the Applicant
2.1 inc Applicant is a registered person under the provisions of eGq,rion.qm Act, 2017 having CSTIN: 21AADITG1,592D2ZW. The Applicant is engaged in the business of “Mining and supply” of Iron Ore. For the purpose of obtaining the mining lease the Applicant has paid the stamp duty including registration fees to register their conveyance /lease deed with the registering authority of the Government of Odisha.
2.2 Under Audit Observation No. 6 dated 10.11.2023 issued by the Asst. Commissioner of Audit, Angul Circle Gr.-1, CGST Bhaubaneswar, the Applicant has been issued with a demand of Rs 6,27,74,106/- to be paid on reverse charge basis against the amount deposited as stamp duty & registration fees for the registering of Conveyance/Lease Deed. Towards this audit observation, it has been submitted that GST on stamp duty would amount to tax on tax which is against the basic principle of taxation and would result in cascading effect. Further, stamp duty is a statutory duty as per Indian Stamp Act, 1899. The duties are levied, collected and appropriated by the respective State Government. It has also been submitted that according to the Si. No. 47 or exemption notification no 12/2017- CT (R) dated 28.06.2017, the service provided by the Central Government, State/UT Government or Local Authority, by way of registration required under any law for the time being in force, attracts nil rate of tax. Both the registration fee & stamp duty are pre-condition for registering the lease deed and the service provided by the Government are exempted by virtue of the notification mentioned supra.
3.0 The personal hearing was fixed on 05.02.2024 under due intimation to the Applicant, the jurisdictional officer of State GST & jurisdictional officer of Central GST (intimated through their respective Commissionerates along with a copy of the application and the written submission of the Applicant The Application through its representative Mr Pramod Kumar Jena appeared for personal hearing. Mr Jena re-iterated the submission already furnished in. the application filed for advance ruling. Further, Mr Jena has submitted a fresh written submission during the time of personal hearing and requested to decide the issue accordingly.
The Revenue has neither submitted its comments nor appeared for personal hearing.
3.1 Consequent upon appointment of New SGST Member vide Government of Odisha Notification No.9739-FIN-CTI-TAX-0072/ 2017 dated 06.04.2024 communicated under Letter C.No.CCT-PEI-POL-0079-2021/5015/CT&GST dated 10.04.2024, a fresh personal hearing was conducted on 23.04.2024. The Applicant through its representative Mr Prarnod Kumar Jena appeared for personal hearing. During P.H., Mr Jena has submitted a fresh written submission .
Discussion & findings
4.0 We have gone through the Advance Ruling application, questions on which advance ruling is sought and the Applicant’s interpretation of law and/or facts, as the case may be, in respect of the questions asked.
4.1 On examination of Advance Ruling application and the submission filed by the Applicant, it is noticed that Asst. Commissioner of Audit, Angul Circle Gr.-1, CGST Bhaubaneswar has issued Audit Observation No 6 dated 10.11.2023 to the Applicant for recovery of Rs.6,27,74,106/- (CGST Rs 3,13,87,053/- + SGST Rs 3,13,87,053) towards GST on RCM on the amount paid towards Stamp duty and Registration fees. Pursuant to the said audit observation, the Applicant has sought ruling . Further, it is also seen that the Applicant has been issued GST DRC-01A by the Addl. Commissioner, Audit Commissionerate vide C.No. GADT/CnG/ADT/GST/2791/2023-GR-1-CGST-ADT CIR-AN GL-ADT-2941 A dated 23.02.2024 for payment of GST on the aforesaid amount. It would be pertinent to mention here that the proviso to sub Section (2) of Section 98 of the CGST Act, 2017 provides that “the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act“.
4.2 In the instant case, the Applicant i.e. M/s Geeta Rani Mohanty, Barbil, appears to have fallen under the first proviso to Section 98(2) of the CGST Act, 2017, by opting for advance ruling at this stage particularly when the subject matter is already taken up and pending in proceedings initiated by the Audit Commissionerate, CGST, Bhubaneswar under Section 65 of the CGST Act, 2017 .
RULING
5.0 In view of the discussion made in the foregoing paras (4.0 to 4.2 as above), the application for advance ruling tiled by the Applicant is not maintainable under law and liable for rejection . Hence, the said application is rejected in terms of Section 98(2) of the CGST Act, 2017.
6.0 The Applicant, if aggrieved by the ruling, may appeal to the Odisha State Appellate Authority for advance ruling under Section 100 of the CGST/OGST Act, 2017 within 30 days from the date of receipt of the advance ruling.
