Recipient of Supply of Services cannot seek Advance Ruling of Taxability of Services by Service Provider: AAR [Read Order]

The Chhattisgarh Bench of the Authority of Advance Rulings (AAR) recently rejected an application by M/s State Water and Sanitation Mission, Jal Jeevan Mission, on the ground that the recipient of services cannot seek advance ruling on taxability of services.

The following questions were left by the representative of the applicant, Sanjay Agrawal, CA to the authority to answer: –

a) Whether Jal Jeevan Mission is correct in classifying the services of (M/s. Call me services) provided to the government entities as exempted services?

b) Whether the services are exempt under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017?

The submissions of the applicant were heard in light of the laws laid down in the relevant acts and previous rulings, along with the relevant Central tax rate notifications.

At this juncture, the authority decided to reach a conclusion on the admissibility first, before going into the merits of the matter.

The authority bench perused the law in Section 95(a) of the Central Goods and Services Tax Act, 2017 and read down the same, “”advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or Sub-section (l) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.”

It was observed that the applicant, in the present case, had not been undertaking or has proposed to undertake any supply of goods or services, but is actually the recipient of service.

The bench of members Sonal K Mishra and Rajiv Kumar Agrawal ruled that, “The ruling so sought by M/s State Water and Sanitation Mission, the applicant, on the issue of taxability of services provided by the service provider to the applicant cannot be answered owing to it being out of the scope of “advance ruling” as stipulated under Section 95(a) of CGST Act, 201 7 read with Section 97(2) of the Act.”

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