GST-registered consumers can approach AAR bench
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-registered consumers 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.
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