AAR has no jurisdiction to decide whether a supply is inter-State or intra-State hence the Application is rejected

Categories: Advance Ruling
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Facts: M/s. Fichtner Consulting Engineers (India) Private Limited, Chennai is an Engineering consultancy organization, providing Engineering Services, mainly Design and Drawings to power and other projects, operating from Chennai and Bengaluru. The brief job description of the applicant is basic and detail engineering for civil, structural, mechanical and utility works for the coal handling plant for the west PIT of Pakri Barwadih Coal Block in North Karanpura Coalfields in Hazaribagh district of Jharkhand state, as per the requirements of NTPC/Tenova’s Enquiry Specifications. Further all deliverables were taken as input for making deliverables / manufacturing by their client towards execution of PO issued by the EPC contractor to them. The SAC assigned for their transaction is 998333 – Engineering Services for Industrial and Manufacturing Projects.

Issues Involved: The Applicant has sought for Advance Ruling on which one is applicable from the following options to charge GST in their transaction from July 01, 2017 –

  1. Charging IGST, treating the place of supply as outside Tamil Nadu since the project site is in the state of Jharkhand (where the Mine /End user is located), as per sec 12(3) of the IGST Act.  (OR)
  2. Charging SGST and CGST, treating place of supply as Tamil Nadu since the drawings are delivered to the client at their Chennai office, in Tamil Nadu.

Held: The Hon’ble AAR of TAMILNADU vide Order No. 2/AAR/2018 dated June 27, 2018 rejects the application by Sub section (2) of Section 98 of the CGST Act, 2017 and the TNGST Act, 2017. Further, Section 97 of the CGST Act, 2017 and Tamil Nadu GST Act (TNGST) has given the scope of Advance Ruling Authority.

(1) An Applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.

(2) The question on which the advance ruling is sought under this Act, shall be in respect of, –

(a) classification of any goods or services or both;

(b) applicability of a notification issued under the provisions of this Act;

(c) determination of time and value of supply of goods or services or both;

(d) admissibility of input tax credit of tax paid or deemed to have been paid;

(e) determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.

No other issue can be decided by the Advance Ruling Authority and therefore the Acts limit the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2). The Application is therefore rejected without going into the merits of the case, on the issue of lack of jurisdiction.

Citation: [2018] 97 taxmann.com 153 (AAR- TAMIL NADU)