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Service Recipient is not eligible to obtain Advance Ruling unless paid GST under Reverse Charge Mechanism

March 12, 2019[2019] 103 taxmann.com 135 (AAR - MAHARASHTRA)
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GST : Where on perusal of transaction proposed to be undertaken, it was evident that applicant was not supplier of services but was recipient of services from supplier, he would not be entitled to seek advance ruling

Facts

• Applicant primarily engaged in providing internet connectivity services sought advance ruling on whether supplier is to charge Integrated Tax on supply of leased circuit facility to applicant, where leased circuit is installed in more than one State or Union territory and contract or agreement doesn't specifically provide proportion of service provided in each State.

Held

• As per section 95, the term 'advance ruling' means a decision provided by Advance Ruling Authority on matters or questions specified in sub-section 2 of section 97, in relation to supply of goods or services or both being undertaken or proposed to be undertaken by applicant.

• From, a perusal of transaction between applicant and supplier, it is clear that applicant is not supplier of services but is recipient of services from their supplier who leased circuit facility to applicant and as such by virtue of section 95 is not an applicant who can obtain advance ruling unless the recipient is paying taxes under reverse charge mechanism on transaction of receipt of supply. In instant case applicant is recipient of services and he is not paying taxes under reverse charge mechanism on impugned transaction in GST Act. Hence, the applicant has not satisfied conditions of section 95 of CGST Act and accordingly the application for advance ruling made by applicant is rejected under provisions of sub-section 2 of section 98.

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