Rajasthan AAR rejects Advance Ruling Application with respect to Supplies Already being Undertaken and GST being Paid [Read Order]

The Rajasthan Bench of the Authority for Advance Ruling (AAR) has recently rejected an advance ruling application with respect to which supplies were already being undertaken and Goods and Services Tax (GST) was already being paid by the applicant.

The applicant, M/s Vishwas Green Energy,  in the advance ruling application filed by it, raised the question as to whether GST is Applicable on GOVT Subsidy and How to Generate GST including Subsidized Invoice.

The applicant is involved in installation of Solar system on roof top and subsidy is provided by

Central Government for this work through Renewable Energy Corporation. The Applicant submitted a GST invoice for reference in which mechanism of raising invoice is given.

1. The applicant submitted that “consideration” in relation to the supply of goods or services or both includes—

any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;

the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government:

Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply.

In the matter an opportunity of personal hearing was granted to the applicant. On behalf Of the applicant Manoj Kumar Choudhary, (Authorized Representatives) appeared for Personal Hearing. During the Personal Hearing, he reiterated the submissions already made in the application.

The Authority Bench of Central Tax Member Umesh Garg and State Tax Member Mahesh Kumar Gowla observed that, “ purpose of Advance ruling is to provide certainty of tax liability in advance in relation to a future activity to be undertaken by the applicant and help the applicant in planning about GST liability on activities well in advance along with proper interpretation and understanding of tax laws. Advance rulings can be given only for a proposed transaction & matters related to qualify for advance ruling whether it will be undertaken or proposed to be undertaken.

It was also observed that advance ruling under GST can be obtained for a proposed transaction as well as a transaction already undertaken by the appellant but the transactions’ on which GST is being paid are out of the purview of advance ruling.

It was thus ruled that, “The subject application for advance ruling made by the applicant is not maintainable and hereby rejected under the provisions of the GST Act, 2017.”

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates