Recipient liable to pay tax on a reverse charge basis deemed as a supplier, able to seek an advance ruling

Facts of the case: In this case, the writ petition was filed to challenge order of Rajasthan AAR, which dismissed the petitioner's application for an advance ruling. The Petitioner engages contractors who transport goods and raise invoices for transportation. The issue for Advance Rulings was whether transportation of goods is exempt under Serial No. 18 of Notification No. 12/2007 Central Tax (Rate). The AAR dismissed the application, citing non-maintainability since the petitioner was not the supplier. The Petitioner argued that the GST Act does not restrict advance ruling applications to suppliers only. However, the respondents argued that the order is appealable, only suppliers or proposed suppliers can seek an advance ruling. Petitioner is not a supplier.

Held that:- The Rajasthan High Court in this case held that the petitioner, being liable to pay tax on a reverse charge basis, is within the definition of a taxable person and applicant under the GST Act. The AAR's interpretation of eligibility was too restrictive, ignoring the contextual application of the definitions. Consequently, the AAR's order was quashed, and the case was remitted for reconsideration. The Court observed that definition of applicant includes anyone registered or required to register under the GST Act, which covers the petitioner – Definition of ‘advance ruling' should be interpreted contextually, considering the petitioner's liability under the reverse charge mechanism – Cited Supreme Court judgment in the case of Vanguard Fire and General Insurance Company Limited, wherein held that Statutory definitions must be read in context; flexibility in interpretation is necessary where definitions start with “unless the context otherwise requires”

To read the complete judgment 2024 taxo.online 1604