Authority for Advance Ruling passes orders on issues raised under GST

This Tax Alert summarizes the orders passed by the Authority for Advance Rulings (AAR) under the GST in different states.   

The outcome of some of the key rulings are summarized below:
•        Supply of UPS and battery for a single price cannot be considered as naturally bundled and hence is treated as mixed supply
•        Supplier having only exempt supplies and also not liable to pay GST under reverse charge, is not required to register under the GST law
•        Promoting the courses of foreign universities in India is not an export of service but to be treated as intermediary services liable to GST
•        Meals provided to employees in a factory canteen is a supply liable to GST
•        Out and out supply without physical imports into India will not attract GST
•        Goods sold in duty free shop at Delhi Airport to international passengers travelling abroad is a supply within India and not exports, hence liable to GST
•        Transfer of undivided share of land under a separate agreement is part of the supply of superstructure, subject however to the abatement under Notification No. 11/2017 – Central Tax (Rate)

 Comments
 •        Rulings of the AAR may have limited applicability as the same would be binding only to the applicant and the jurisdictional tax authorities, basis the facts of the case submitted before the AAR.
 
•        One will need to analyze the complete facts of the case before placing reliance on Advance Ruling as it may have a significant bearing on the tax treatment of the transactions, particularly those which are of recurring nature or involving high stakes.
 
•        The finding of the AAR holding divisibility of contract as a key determinant of the nature of supply i.e. mixed supply or a composite supply, despite the products being interdependent and integral could be debatable. Industry should evaluate supplies of more than one products on case to case basis in light of the said ruling.
 
•        AAR’s observations on taxing the entire consideration notwithstanding the fact that the agreement between the developer and the buyer is entered after part of the construction is already completed, will need to be analyzed in light of the apex court ruling and the tax treatment under the erstwhile indirect tax regime.
 
•        Non-applicability of IGST on imported goods which do not enter territory of India may remain litigious in view of its implications on reversal of input tax credit as such supply is treated as non-taxable supply.