GST-registered consumers can approach AAR bench – Times of India

The Calcutta high court has held that a service recipient can seek an advance ruling to determine the applicability or the rate of goods and service tax (GST). This recent ruling was giving in the case of Anmol Industries. It opens up possibilities for several service recipients (that is, registered under GST, including registered business persons & professionals) in a plethora of instances to gain clarity via an advance ruling on goods or services purchased or intended to be purchased by them.
In the past, several benches of the Authority for Advance Rulings (AAR) across India rejected applications by service recipients on the grounds that the term ‘advance ruling’ is defined to mean a decision in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the ‘applicant’. The high court held that service recipients fall under the meaning of the term ‘applicant’.
In this case, Shyama Prasad Mookerjee Port had agreed to lease an industrial plot of land to Anmol Industries for a period of 30 years for setting up commercial office complexes. The lease called for an upfront lease premium plus an 18% GST. As AnmolIndustries (the recipient) was of the view that the lease premium was GST-exempt, it had approached the AAR, but its application was denied. This led to it approaching the Calcutta high court.
“Considering that the high court has interpreted recipients as eligible to apply for advance rulings, it opens up avenues for GST-registeredconsumers to approach the authorities for clarifications in case they are facing the brunt of conservative interpretation by the suppliers,” said Sunil Gabhawalla, chartered accountant and indirect tax expert.
He illustrated: If a person has been given a flat in lieu of his earlier premises by the builder under a redevelopment project, no GST may be leviable in view of favourable tribunal rulings. However, out of abundant caution, builders in some instances impose GST. This individual, if he is registered under GST, can — based on the high court decision — obtain an advance ruling.
Gabhawalla clarified it is only those service recipients (consumers) who are registered under GST who can approach the AAR. This means a consumer who is a salaried individual and does not have to register for GST will not be able to seek an advance ruling.