The West Bengal Authority of Advance Ruling (AAR) ruled that Supply of service to Bharat Coking Coal Ltd. (BCCL) in terms of the Maintenance and Repair Contract (MARC) is not an import of service. The recipient is not, therefore, liable to pay GST on a reverse charge basis in terms of Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017.
The applicant, M/s IZ-Kartex named after PG Korobkov Ltd. is the local branch of a Russian business entity by the same name (Foreign Company), which entered into a Maintenance and Repair Contract (MARC) with Bharat Coking Coal Ltd (BCCL) with respect to the machinery and equipment it had supplied.
The applicant sought the advance ruling on the issue of whether the MARC makes the supplier liable to pay GST (which, for the purpose of this order, includes IGST). More specifically, the applicant wants to know whether the recipient is not liable to pay tax on a reverse charge basis in terms of Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017. The question is admissible under section 97(2) (b) & (e) of the GST Act. The concerned officer from revenue submits that question raised in the application is not pending or decided in any proceedings of the GST Act. As such, he does not object to the admissibility of the application.
The authority consisting of members Susmita Bhattacharya and Parthsarthi Dey ruled that supply of service to BCCL in terms of the MARC is not an import of service. The recipient is not, therefore, liable to pay GST on a reverse charge basis in terms of Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017. The applicant, being the domestic MARC Holder, is liable to pay tax as applicable in terms of clause 9.2.2 of the MARC.
“This Ruling is valid subject to the provisions under Section 103 until and unless declared void under Section 104(1) of the GST Act,” the AAR said.
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