2019(05)LCX0137(AAAR)
AAAR-RAJASTHAN
M/s IMF Cognitive Technology Private Limited
decided on 08/05/2019
RAJASTHAN AUTHORITY FOR ADVANCE
RULING
GOODS AND SERVICES TAX
KAR BHAWAN, AMBEDKAR CIRCLE,
NEAR
RAJASTHAN HIGH COURT
JAIPUR - 302005 (RAJASTHAN)
Proceedings under Section 101 of the Central GST Act,2017 read with Rajasthan GST Act, 2017
Before the Bench of
1. Sh. Rakesh Kumar Sharma, Member(Central Tax)
2. Dr. Preetam B. Yashvant, Member(State Tax)
ORDER NO. RAJ/AAAR/01/2019-20 DATED 08.05.2019
Name and address of the Appellant |
: |
M/s IMF Cognitive Technology Private Limited, 208, Brij Anukampa K-13, Ashok Marg, C -Scheme, Jaipur-302001 (Rajasthan) |
GSTIN of the Appellant |
: |
08AAECI1271Q1Z6 |
Clause(s) of Section 97(2) of CGST / SGST Act, 2017, under which the question(s) raised |
: |
Admissibility of input tax credit of tax paid or deemed to have been paid. |
Date of Personal Hearing |
: |
02.05.2019 |
Present for the Appellant |
: |
1. Shri Jatin Harjai, CA 2. Ms. Neha Sethi, CA |
Details of Appeal |
: |
Appeal No. RAJ/AAAR/APP/08/2018-19 dated 12.02.2019 against Advance Ruling No. RAJ/AAR/2018-19/30 dated 09.01.2019 |
(Proceedings under Section 101
of the Central GST Act, 2017 read with Section 101 of the Rajasthan GST Act,
2017)
At the outset, we would like to make it clear that provisions of both the
Central GST Act, 2017 and Rajasthan GST Act, 2017 are same except for certain
provisions. Therefore, unless a mention is specifically made to such dissimilar
provisions, a reference to the Central GST Act would also mean a reference to
the same provisions under Rajasthan GST Act.
2. The present appeal has been filed under Section 100 of the Central GST Act,
2017 (hereinafter also referred to as CGST Act) read with Section 100
of the Rajasthan GST Act, 2017 (hereinafter also referred to as RGST Act)
by M/s IMF Cognitive Technology Private Limited, Jaipur against the Advance
Ruling No. RAJ/AAR/2018-19/30 dated 09.01.2019.
Brief Facts of the Case
3. M/s. IMF Cognitive Technology
Private Limited, Jaipur (hereinafter also referred to as the Appellant) is a
Private Limited Company holding GSTIN 08AAEC11271Q1Z6 in the State of Rajasthan.
The Appellant is engaged in development, designing and trading in all types of
computer software. They are engaged in export of software as well.
4. The Appellant procures various Goods or Services for the purpose of trading
and export both within the State of Rajasthan and outside the State of
Rajasthan. The Appellant claims the credit of taxes paid on Goods and Services,
which are used in the course or furtherance of business and the place of supply
of such Goods/Services is the State of registered place of business i.e.
Rajasthan.
5. In case of procurement of inward supplies from other States, at times,
supplier charges Central GST & State GST of the State of supplier. For example,
the Appellant is registered in the State of Rajasthan and if they procure
Services of short term accommodation (i.e. Hotel) in Haryana, the supplier (i.e.
Hotel) charges Central GST & State GST of that State, due to the reason of place
of supply being in the State of Supplier.
6. The eligibility for input tax credit is governed by the provision of Section
16(1) of CGST Act, 2017. As per understanding of the Appellant, the provisions
of Section 16(1) entitles the registered person to claim input tax credit of
input tax paid on inward supply of Goods and/or Services which are used or
intended to be used in the course or furtherance of business. The term input
tax has been defined in Section 2(62) of the CGST Act, 2017.
7. In the case under consideration, on the Hotel services which are procured in
the State of Haryana, the Appellant has paid the Central GST & Haryana GST. Such
Hotel services are being used exclusively for the purposes of business of the
Appellant i.e. for meeting with prospective buyers and vendors.
8. The Applicant/Appellant had sought ruling under Section of the CGST Act 2017,
on the following question:-
Whether the input tax credit of Central Tax paid in Haryana be available to the
Applicant who is registered in Rajasthan State ?¯
9. The Rajasthan Authority for Advance Ruling, GST, Jaipur (hereinafter referred
to as AAR¯ also) observed that in the GST regime, State GST and Central GST
charged for the Services provided and availed in a State would be eligible for
ITC within that particular State where such services were provided and consumed.
As the supplier of services and place of supply both are outside the state of
Rajasthan, Input tax credit of Central Tax paid in Haryana is not available to
the Applicant/ Appellant.
Grounds of Appeal
10. Being aggrieved, the Appellant has filed the subject appeal wherein they
have inter alia contended that :-
(i) whether in the facts and circumstances of the case and in law, is it
justified by the AAR to interpret the law by giving preamble of CGST Act, 2017
for levy of GST whereby the Applicant/Appellant has asked question on Input tax
credit and not on leviability of tax ?
(ii) whether in the facts and circumstances of the case and in law, is it
justified by the AAR to decide admissibility of credit on the basis of location
of supplier and place of supply, while provisions of GST law for admissibility
of Input Tax Credit are separately provided under Chapter V of the CGST Act and
there is no correlation between admissibility of Credit and Place of Supply?
(iii) whether in the facts and circumstances of the case and in law, is it
justified by the AAR to decide the case without giving any observation or
reasoning on the comments given by the jurisdictional officer and disposing of
the application for ruling without giving any specific reference to any
provision of the law, while the Applicant had requested for the same
specifically ?
(iv) whether in the facts and circumstances of the case and in law, is it
justified by the AAR to go beyond the question raised by the Applicant/Appellant
by observing admissibility of input tax credit in respect of State, while the
question was in respect of credit of Input tax paid in the form of Central Tax
to Central Government only?
Personal Hearing
11. A personal hearing in the matter was held on 02.05.2019. Shri Jatin Harjai,
CA & Authorised Representatives and Ms. Neha Sethi, CA appeared on behalf of the
Appellant. Shri Jatin Harjai reiterated the submissions made in their appeal
memorandum. He also submitted a written brief at the time of PH and reiterated
the submissions mentioned therein.
Discussion and Findings
12. We have carefully gone through the Appeal papers filed by the Appellant, the
Ruling of the AAR, as well as oral submissions made by the authorized
representative's) of the Appellant, at the time of Personal Hearing held on
02.05.2019. We find that the Appellant had requested for Ruling on whether the
input tax credit (hereinafter referred to as ITC¯ also) of the Central GST paid
by them in the State of Haryana is admissible to them or not?
13. The Rajasthan Authority for Advance Ruling, Goods and Service Tax, Jaipur (AAR)
in its Ruling No. RAJ/AAR/2018-19/30 dated 09.01.2019, has pronounced that the
credit of the Central GST paid by the Appellant in the State of Haryana is not
admissible to them. Contention of the Appellant is that the ITC provisions allow
them to claim the credit of the Central GST paid on the input services availed
in the State of Haryana. They have taken objection to the AAR delving into
preamble of the CGST Act for denying them ITC of the Central tax paid in Haryana.
14. We find a piquant situation here. Piquant in the sense that the Appellant is
asking for the ITC of only Central tax paid in Haryana. It means that they are
sure that ITC of the State GST paid in Haryana is not admissible to them. This
is true also because State GST Act of Rajasthan (i.e. RGST Act) allows ITC of
only State GST paid in Rajasthan. In the GST Law, we find that both of these
taxes i.e Central GST and State GST go hand in hand. Wherever Central GST is
applicable, State GST is also applicable. No situation has been contemplated
where one of these tax is applicable but another not. In nutshell if any event
attracts Central GST, it would also attract State GST. From this, it naturally
flows that if ITC of State GST is not admissible, ITC of Central GST should also
not be admissible. But we have to find out whether Law specifically bar this or
not.
15. To this end, we are examining the ITC provisions of the CGST Act. Relevant
Section is Section 16(1) which is being reproduced for the sake of convenience.
On.
16(1) - Every registered person shall, subject to such conditions and
restrictions as may be prescribed and in the manner specified in section 49, be
entitled to take credit of input taxcharged on any supply of goods or services
or both to him which are used or intended to be used in the course or
furtherance of his business and the said amount shall be credited to the
electronic credit ledger of such person.¯
16. After going through the Section 16(1) above, which allows credit of input
tax to a registered person, subject to conditions and restrictions, it is
necessary to know what input tax is. The term input tax has been defined in
Section 2(62) which is also being reproduced for the sake of convenience :-
Input Tax¯ in relation to a registered person, means the central tax, State
tax, integrated tax or Union territory tax charged on any supply of goods or
services or both made to him and includes --------------------------
17. On perusal of the Section 2(62) as reproduced above, it becomes clear that
the input tax inter alia is Central tax charged on inward supply of a registered
person. While Central tax, as per Section 2(21) of the CGST Act, means the
Central Goods and Services Tax (Central GST) levied under section 9. After going
through the Section 9, we find that Section 9(1) is relevant to the instant
matter. So we are reproducing the provisions of Section 9(1) of CGST Act for the
sake of convenience :-
9(1): Subject to the provisions of sub-section (2), there shall be levied a tax
called the central goods and services tax on all intra-State supplies of goods
or services or both, except on the supply of alcoholic liquor for human
consumption, on the value determined under section 15 and at such rates, not
exceeding twenty per cent. , as may be notified by the Government on the
recommendations of the Council and collected in such manner as may be prescribed
and shall be paid by the taxable person.
18. Going through the above Section 9(1), we come across a phrase intra-State
supplies of goods or services¯. Section 8(2) of the Integrated GST Act, 2017
defines intra-state supplies of services. The Section is being reproduced for
the sake of convenience :-
8(2) Subject to the provisions of section 12, supply of services where the
location of the supplier and the place of supply of services are in the same
State or same Union territory shall be treated as intra-State supply:
Provided that the intra-State supply of services shall not include supply of
services to or by a Special Economic Zone developer or a Special Economic Zone
unit.
19. From above we find that credit of input tax is admissible to a registered
person, subject to conditions and restrictions, and input tax inter alia is
Central tax charged on inward supply of a registered person. Going further,
Central tax is Central GST levied under Section 9 of the CGST Act. After going
through the Section 9(1) above, we find that the Central GST is a tax levied on
all intra-State supplies of goods or services or both Going ahead, Intra-state
supply of service, as per Section 8(2) of the Integrated GST Act, 2017 means
supply of services where the location of the supplier and place of supply of
services are in the same State. Thus crux of the matter is that for a person
registered in Rajasthan, Central GST or Central tax is a tax levied under
Section 9 ibid on supplies having both location of the supplier and place of
supply in Rajasthan. At this point it becomes absolutely clear that ITC of the
Central GST or Central tax would be available to a person registered in
Rajasthan if the location of the supplier and place of supply of the services
are in Rajasthan. In other words, ITC of the Central tax charged from the
Appellant in Haryana is not available to them as in this case both the location
of the supplier and place of supply of the services are in the State of Haryana.
Accordingly we pass the following order :-
ORDER
20. We uphold the Advance Ruling rendered by the Rajasthan Authority for Advance Ruling, Goods and Services Tax, Jaipur vide their Ruling No. RAJ/AAR/2018-19/30 dated 09.01.2019, in respect of ITC of the Central GST paid in Haryana, which has been held as not admissible¯ to the Appellant. Consequently, the Appeal filed by the Applicant/Appellant i.e. M/s. IMF Cognitive Technology Private Limited, Jaipur is not legally sustainable and hence is liable to be dismissed and we hold accordingly.
(RAKESH KUMAR SHARMA)
MEMBER (CENTRAL TAX)
(DR. PREETAM B. YASHVANT
MEMBER (STATE)
To,
M/s IMF Cognitive Technology7 Private Limited, 208, Brij Anukampa
K-13, Ashok Marg, C -Scheme,
Jaipur-302001 (Rajasthan)
Dated. May, 2019
F.No. IV(16)AAAR/RAJ/08/2018-19/
Copy to
1. The Chief Commissioner of CGST & Central Excise (Jaipur Zone), NCR Building,
Statue Circle, Jaipur-302005.
2. The Commissioner of RGST & Commercial Taxes, Rajasthan, Kar Bhawan, Bhawani
Singh Road, Ambedkar Circle, C-Scheme, Jaipur-302005.
3. The Principal Commissioner , Central GST Commissionerate , NCR Building,
Statue Circle, Jaipur-302005.
4. Deputy Asstt. Commissioner, Circle-N, Jaipur, Commercial Taxes Deptt.,
Kar-Bhawan, Jhalana Institutional Area, Jaipur- 302 004
5. The Asstt. Commissioner, Central GST Division-H, CGST Building, Sector- 10
Vidhyadhar Nagar, Jaipur - 302023
6. Rajasthan Authority for Advance Ruling, Goods and Service Tax, NCR Building,
Statue Circle, Jaipur-302005
7. Guard File
(Pramod Kumar Sharma)
Superintendent
Equivalent .