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AAR has jurisdiction to determine ‘Place of Supply’ under GST: Kerala HC directs Govt to remove Ambiguities in Provision [Read Judgment]

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The Kerala High Court has directed the government to remove ambiguities in Provision and the Authority of Advance Ruling ( AAR ) has jurisdiction to determine the  ‘Place of Supply’ under Goods and Service Tax (GST).

In the case of Sutherland Mortgage Services INC vs. Commissioner of State tax, it was observed that the foreign entity ought to have an idea pertaining to the tax liability so that they can accordingly modulate their future outlook. Any foreign entity or a domestic investor getting incentives to continue and increase their level of activities which will have a positive impact on the overall economic development.

The petitioner namely Sutherland Mortgage Services INC, which has its headquarters at the U.S.A. and one of its branches are situated in the Cochin Special Economic Zone (SEZ). The petitioner is engaged in the business of providing mortgage orientation, primary servicing, special servicing, cash management and analytics; and reporting. The principal company situated in the U.S.A. and a branch in India entered into an agreement which was called ‘intra company agreement’. The branch situated in India supplied its services to the customers in the U.S.A.

The issue raised in this case was whether the definition of ‘place of service’ would come within the ambit of Section 97(2) of the CGST Act which speaks of determination of liability to pay tax on any goods or service or both?

The Single bench of the High Court of Kerala consisting of Justice Alexander Thomas directed the government to remove ambiguities in Provision and the Authority of Advance Ruling (AAR) has jurisdiction to determine ‘Place of Supply’ under Goods and Service Tax (GST).
The court also held that the issue pertaining to the place of supply is not expressly mentioned in Section 97(2) and ordered the Authority of Advance ruling to reconsider the order. And the Authority of Advance Ruling (AAR) has no jurisdiction to determine ‘Place of Supply

It was observed that the foreign entity ought to have an idea pertaining to the tax liability so that they can accordingly modulate their future outlook. Any foreign entity or a domestic investor getting incentives to continue and increase their level of activities which will have a positive impact on the overall economic development.

To Read the full text of the Order CLICK HERE
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