RJ GST AAR Cancels Petitioner’s Application, Supply and Tax Payment Completed

An application for an advance ruling that was recently rejected by the Rajasthan Bench of the Authority for Advance Ruling (AAR) involved supplies that were already being made and for which the applicant had already made Goods and Services Tax (GST) payments.

In its request for an advance judgement, the assessee, M/s Vishwas Green Energy, questioned whether GST applied to government subsidies and how to create a GST invoice that included subsidies.

The assessee is working with Renewable Energy Corporation to put a solar system on their roof with help from the central government. The assessee submitted a GST invoice that contains instructions on how to raise an invoice.

The applicant provided the following consideration for the supply of goods or services or both:

Any payment made or to be made, whether in cash or another form, concerning, as a result of, or to encourage the provision of goods or services, or both, by the recipient or by anyone else, but which excludes any subsidy provided by the federal or state governments:

with the exception that a deposit made for the delivery of goods, services, or both will not be regarded as payment for the supply unless the supplier uses the deposit as payment for the supply in question.

In this instance, the petitioner was given the choice of a personal hearing. On the basis of Manoj Kumar Choudhary’s plea, authorized representatives asked for a personal hearing. He restated the material included in the application during the personal hearing.

The objective was to provide certainty of tax liability in advance regarding a future activity to be carried out by the applicant and assist the assessee in planning about GST liability on those activities well in advance, along with accurate interpretation and understanding of tax laws, noted the authority bench of Central Tax Member Umesh Garg and State Tax Member Mahesh Kumar Gowla. Only proposed transactions are eligible for advance decisions, and whether the transaction is actually going to happen or is only being proposed to happen is important.

Additionally, it was highlighted that under the GST, advance rulings may be requested for both proposed and completed transactions by the applicant, but not for transactions for which GST is already being paid.

As a result, it was decided that the applicant’s application was rejected in accordance with the GST Act, 2017 since it could not be upheld.