Recipient of Works Contract Services Not Eligible to Seek Advance Ruling u/s 97 of CGST Act: AAR Rejects Application [Read Order]

The Karnataka Authority for Advance Ruling (KAAR) has rejected an application for the advance ruling holding that a recipient of works contract services is not eligible to seek an advance ruling under Section 97 of the CGST ( Goods and Services Tax ) Act, 2017.

The applicant, an unregistered individual, had purchased a flat from M/s Shriprop Projects Limited, a concern of Shriram Properties Pvt. Ltd., and sought clarity on the rate and value on which GST was applicable in respect of the works contract services received.

Despite duly discharging the application fee under both the CGST and KGST Acts and appearing for a personal hearing via video conference on April 8, 2025, the applicant’s request was found to be beyond the jurisdiction of the authority.

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The AAR, in its detailed reasoning, referred to the definition of “advance ruling” under Section 95(a) of the CGST Act, which makes it clear that such a ruling can be sought only by a person undertaking or proposing to undertake the supply of goods or services or both.

Since the applicant was merely a recipient of services and not engaged in any form of supply, the authority concluded that the case was not maintainable.

Accordingly, exercising its powers under Section 98(2) of the CGST Act, the bench of Prathap Kumar S and M.S. Prithvi rejected the application, stating unequivocally that recipients of works contract services fall outside the scope of persons eligible to seek an advance ruling.

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