The Calcutta High Court in the Anmol Industries Limited And Anr. Vs. The West Bengal Authority of Advance Rulings, Goods and Service Tax & Ors. Vide MAT 630 of 2023 with I.A. No. CAN 1 of 2023 dated 21.04.2023, held that ‘Service recipient” entitled to file an application before the Authority for Advance Ruling (AAR) under GST law. Accordingly, the court set aside the ruling of West Bengal AAR given vide Order no. WBAAR 30 of 2022 Order No. 26/WBAAR/2022-23 dated 09.02.2023. The Court remanded back the matter back to AAR to decide the application on merits and in accordance with the law.

Earlier, many AAR have ruled that application for advance ruling can be filed only by the supplier of goods or services or both, and therefore the recipient of goods or services or both cannot seek advance ruling for its inward supply.

Facts:

• The appellant entered into a 30-year leasing agreement with the Shyama Prasad Mookerjee Port, Kolkata (SMPK) for a piece of land which will be used for setting up commercial office complex. It has been agreed that the appellant would pay over ₹39 crore SMPK as upfront lease premium. It was also said that the allotment letter further seeks to charge GST at 18 per cent on the payment.
• The appellant was of the view that upfront lease premium is covered by Entry No. 41 of the Exemption Notification No. 12/2017-Central tax dated 28.06.2017 as amended time to time, and the same is exempt from GST.
• The Appellant moved to West Bengal AAR, and sought advance ruling on “Whether the upfront premium payable by the applicant towards the services of leasing of the land for industrial purposes by SMPK is exempted under entry 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017”

AAR Observations: It was observed that the application cannot be accepted since an application for advance ruling can be filed by the supplier in relation to supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. However, here the applicant was the recipient of services.

Submission of Appellant –

• On the combined reading of the Section 95(c) and 97 of the CGST Act, 2017, provides that an applicant can apply for advance ruling on the questions as stated therein which includes the applicability of a notification issued under the provisions of the Act. In the present case, question is raised on applicability of exemption notification No. 12/2017-CGST (R) dated 28.06.2017, which is an eligible question for seeking advance ruling.
• Further, the provisions nowhere states that the applicant has to be service provider in order to seek an advance ruling on the questions as stated.  Had that been the intent of the legislature, the legislature would not have used the term applicant in section 95(c) and would have rather used the word supplier which is already defined under section 2(105) of the Act.
• The only condition to be fulfilled is that the applicant should be registered under the Act or desirous to undertake a registration.
• The words ‘in relation to the supply of goods or services or both’ in Section 95(a) of CGST Act, 2017, can be interpreted to include, supply of both inward supply and outward supply.
• The definition of term ‘advance ruling’ the expression has been mentioned as ‘supply of goods or services or both’ and not as a ‘supplier of goods or services or both’. It therefore means that both the inward supplier (that is recipient) and outward supplier (that is supplier) can file an application for advance ruling.

Held –

• The Hon’ble High Court observed that the term “applicant” defined under Section 95(c) of the CGST Act, 2017, means any person registered or desirous of obtaining registration under the Act.
• The court taken the view that the said term has been defined in the most widest possible manner to include any person registered or desirous of obtaining a registration under the Act.
• In the present case, there is no dispute that the appellant is registered under GST Law. Further, the application filed by the appellant falls under clause (b) of Section 97(2) as the appellant seeks ruling on applicability of exemption notification.
• Reliance in the case M/s. Gayatri Projects Limited & anr. Vs. The Assistant Commissioner of State Tax, Durgapur Charge & Ors. in M.A.T. No.2027 of 2022 dated 05.01.2023, where this court held that appellants being the registered person under law would fall within the definition of ‘applicant’, even though the appellant therein were not parties to the proceedings before the AAR.
• In the present case, the appellant fulfils the eligibility to seek advance ruling.

Accordingly, the court set aside the ruling of AAR and remanded back the matter to AAR to decide the application on merits and in accordance with the law.