The Gujarat Authority for Advance Ruling (GAAR), Ahmedabad has rejected an application for advance ruling seeking clarification on various aspects of the Goods and Services Tax (GST) on the finding that the same is beyond jurisdiction as the place of supply of goods and services is Madhya Pradesh and Not Gujarat.
The rejection came after the authority found that the place of supply for the applicant’s services was outside the jurisdiction of Gujarat, making it ineligible for a ruling by the GAAR.
The applicant, M/S. Pooja Construction Company is a partnership firm engaged in the business of general government civil contractors, providing work contract services related to construction, erection, repairing, renovation and maintenance of immovable properties.
The applicant is registered under GST and has undertaken projects in different states, including a significant contract with the Narmada Valley Development Department, a government entity, for the operation and maintenance of various installations in Madhya Pradesh.
The applicant clarified that the services provided by them include supply of goods as well as Manpower Services.
The applicant had sought clarification on whether they are required to obtain registration with the State Tax Authorities of Madhya Pradesh State.
The applicant also needs clarity on the applicable tax rate for providing the services including supply of goods as well as Manpower Services as per the contract with the Narmada Valley Development Department.
The applicant requested the AAR to confirm the appropriate Service Accounting Code (SAC) applicable for the services provided under the work contract.
The GAAR found the application submitted by the applicant to be cryptic and difficult to comprehend.
The authority noted that the lack of clarity in the application led to confusion about the jurisdiction in which the ruling should be issued.
The applicant, represented by Sanjay Mulchandani, Krunal Gorasia and Amit Raval confirmed during the personal hearing that the place of supply for their services was Madhya Pradesh.
Given that the supply was made in Madhya Pradesh and not in Gujarat, the GAAR determined that they did not have the authority to rule on the matter.
The GAAR stated that the proper authority to provide a ruling on the questions raised in the application is the Madhya Pradesh Authority for Advance Ruling (MAAR).
In result, the two-member bench consisting of Milind Kavatkar (State Goods and Services Tax (SGST) Member) and Amit Kumar Mishra (Central Goods and Services Tax (CGST) Member) rejected the application filed by M/S. Pooja Construction Company on the issue of jurisdiction, without going into the other questions, stating that the applicant’s questions regarding registration requirements, tax rates and SAC codes for their works contract services in Madhya Pradesh would need to be addressed by the appropriate authority in that state, the MAAR.
The rejection of the application by the GAAR highlighted the need and importance of presenting clear and comprehensible questions with precision and clarity while seeking advance rulings to avoid jurisdictional issues.
The ruling also emphasised the relevance of the place of supply for goods and services as it determines the appropriate jurisdiction for seeking clarifications.
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