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Calcutta HC holds recipient eligible to seek advance ruling on taxability of a transaction
This tax alert summarizes a recent ruling[1] of the Calcutta High Court (HC) on the question of whether a “recipient” can apply for advance ruling with respect to applicability of an exemption notification on services received by it.
A writ petition was filed against an order passed by the West Bengal Authority for Advance Ruling (AAR), wherein, an application filed by the assessee was rejected on the ground that assessee being the recipient, had no locus standi to file such an application.
HC observed that as per Section 95(c) of the Central Goods and Services Tax Act, 2017 (CGST Act), the term “applicant” has been defined to mean any person registered or desirous of obtaining registration under the Act. The said term has been defined in the widest possible manner. Assessee, being a registered person, would clearly fall within the definition of “applicant”. Reliance in this regard was placed on another Calcutta HC ruling in case of Gayatri Projects Limited[2]
HC also noted that assessee sought ruling with respect to applicability of exemption notification[3] on services received by it. The said issue is covered under the provisions of Section 97(2) of the CGST Act, which deals with the questions on which advance rulings can be sought. Accordingly, it was well within the jurisdiction of the AAR to consider the application on merits rather than rejecting the same.
Basis above, HC allowed the writ petition and set aside the order passed by the AAR. The matter was remanded back to the AAR to decide the application on merits and in accordance with law.
Comments:
In the past many applications for advance ruling were rejected by AAR on the ground that recipients do not have any locus standi for filing the application w.r.t taxability of goods or services received by it.
Basis this judgement, recipients may now apply for advance rulings in connection with the issue of classification, determination of time and value of supply, etc., of the goods and services received by it.
[1] 2023-VIL-251-CAL [2] 2023-VIL-17-CAL [3] Notification no.12/2017-CGST (Rate) dated 28 June 2017