2018 (9) TMI 975 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (17) G. S. T. L. 518 (A. A. R. – GST) – Maintainability of Advance Ruling Application – proceedings are already initiated against them before the filing of their present application – Section 98 of the CGST Act – Levy of GST – excess length of Optic Fibre (OF) – independent customers – distinct persons in terms of Schedule I provisions – CENVAT credit.
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Held that:- It is very clear that proceedings under the relevant provisions of this Act are initiated in respect of the application prior to their filing of this application for Advance Ruling – the application filed by the applicant is not maintainable as per the provisions of Section 98 of the CGST Act, as proceedings are already initiated against them before the filing of their present application.
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The applicant's application is liable for rejection as per proviso to section 98 (2) of the CGST Act and therefore cannot be entertained by this authority and
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in terms of Schedule I provisions? 1.3 If GST is not payable separately on the excess length, whether the Company is required to reverse proportionate credit to the extent of supply such excess length? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act /MGST Act would be mentioned as being under the GST Act . 02. FACTS AND CONTENTION – AS PER THE APPLICANT STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTION(S) ON WHICH THE ADVANCE RULING IS REQUIRED 1. This Application is being preferred by Sterlite Technologies Limited, Maharashtra ( Company / Applicant ), a company in
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nits located in Rakholi and Dadra as well as to third party customers on payment of appropriate GST. Such OF is then further used for manufacture of OFC. 5. It is pertinent to note here that owing to global standard practices, OF is strictly required to be used in specified lengths (e.g. in the multiples of 2.1 kilometre/2.2 kilometre). However, due to practical challenges explained herein below it is not feasible to manufacture the OF at the exact length of standard specification: a. Speed of the machine: – The Of while being manufactured and winded around a spool moves at a higher velocity and identifying the exact length is a technical challenge, b. Precautionary measures: – The loose ends of the OF are vulnerable to damages and loss of necessary characteristics. Thus, if the Of is manufactured and winded up in exact length, any damage to the loose ends would render entire length OF in the spool unusable owing to shortfall in maintaining standard length. 6. To overcome these practic
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/not marketable OF as scrap on payment of applicable GST. 8. It is pertinent to note that the price charged to the customers has been arrived for delivered quantity keeping in mind the usable quantity. That is to say, price for the usable quantity is arrived at by including cost of manufacturing excess length on which the GST liability has been discharged. 9. However, owing to absence of any consideration earmarked for difference between delivered quantity and usable quantity in case of supplies made to independent customers, dispute may arise with respect to correctness of the Transaction value and provisions of Central Goods and Services Tax Rules, 2017 ( CGST Rules ) concerning valuation of supply to include cost of manufacturing excess length in the Transaction Value to determine assessable value may be invoked. 10. Further, since supply of OF to its own units in Dadra and Nagar Haveli is treated as supply between distinct persons, the assessable value is determined under Rule 28(a
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urpose of charging GST in spite of the fact that the cost of such excess length is already included in the standard price charged to the customers. Without going into the detailed submissions of the applicant we find that the department has opposed the admission of the application under section 98 of the GST Act statin that the question raised in the application is already pending before the department as an Anti-Evasion investigation is already underway against the applicant on the same issue. 04. CONTENTION AND OBJECr10NS TO ADMISSION OF THE APPLICATION- AS PER THE CONCERNED OFFICER The jurisdictional Officer Assistant Commissioner (Preventive) GST & Central Excise, Aurangabad, vide letter dated 1 2th July, 2018 has submitted factual details before this authority about the investigation being undertaken by them on the same issue as raised by the applicant in their Advance Ruling Application. However the full facts and details of the investigation are not being reproduced here for
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the case of an applicant under any of the provisions of this Act In view of the express provisions given in the CGST Act, 2017 and Maharashtra GST Act, 2017, the application submitted by the taxpayer before the Authority for Advance Ruling, shall not be entertained and deserved to be rejected out rightly at the admission stage only. Further, during the course of investigation, an intimation under letter dated 23.05.2018 was received from M/S Sterlite, wherein it is mentioned that in continuation to the statement dated 16.05.2018 of Shri C.S. Kali they are submitting a statement of reversal of ITC credit availed wrongly during the period from July 2017 to April 2018. In the said letter, it is mentioned that they have reversed an amount of ₹ 3,14,56,050/- along with interest of ₹ 24,73,379/- and submitted the detailed work-sheet of entries against which they availed irregular ITC. It is also pertinent to mention here that the taxpayer at nowhere in the invoices issued have m
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e CGST Act, 2017. In this connection, your attention is invited towards proviso to Section 98 of the CGST Act, 2017, (similar provision has been given in proviso to Section 98 of the Maharashtra GST Act, 2017), wherein it is specifically provided that the Authority for Advance Ruling shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act . In view of the express provisions given in the CGST Act, 2017 and Maharashtra GST Act, 2017, the application submitted by the taxpayer before the Authority for Advance Ruling, shall not be entertained and deserved to be rejected outrightly at the admission stage only. Further, the taxpayers is required to declare before Authority of Advance Ruling, in para 17 of form GST ARA-01 that whether question raised in the application is already pending or decided in any proceedings in applicant's case under any provisi
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rway. The statements of the key persons in this regard have been recorded under the provisions of CGST Act, 2017 read with Central Excise Act, 1944 It is also imperative to mention that this office is investigating issues which are pre-GST as well as post GST. As such, the advance ruling authority has no jurisdiction over pre-GST issues. In the backdrop that the taxpayer has filed application before Authority for Advance Rulings, Mumbai where only the State Tax, Maharashtra has been mentioned as party. It appears that the matter, if decided without the contention, comments of the CGST Aurangabad Commissionerate, i.e. the office which is carrying out investigation on the issue and not yet a party to the issue, may not sound prudent. In view of the above, it is requested that the Assistant Commissioner (Preventive), CGST Commissionerate, Aurangabad may be made a party to the subject issue and comments / views may be taken before deciding the issue. This is issued with the approval of the
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r. Sonware submitted that their Waluj & Shendra manufacturing units were searched by the Central GST office Aurangabad during 2/4/2018 to 3/4/2018. Mr. Sonwane explained about the Manufacturing process of optic fiber and optic fiber cable. He also explained the issue of mis-declaring the quantity of goods by under declaring the same in the invoices issued. As, Mr. Sonwane Associate Manager of Sterlite Technologies Ltd provided the information of search undertaken by Central GST office, Aurangabad: to ascertain the facts, I wrote letter to Hon. Joint Commissioner (Preventive) GST and Central Excise. Aurangabad. In this regard, in the reply, I received a letter from Mr. A.G. Sable, Assistant Commissioner (Preventive) GST and Central Excise, Aurangabad and he furnished the information about the investigation action taken during 02/04/2018 to 03/04/2018 by Central GST office. Hence, it is clear that M/s. Sterlite Technologies Ltd. (GSTIN k7AAEC58719BIZC) has applied in Form GST ARA 01
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the application when Sh. Rohit Jain, Advocate appeared and stated that he was not completely ready with respect to arguments for admissibility of application and requested for another date of hearing for making oral and written submissions with respect to admissibility. Jurisdictional Officer Sh. Ravinder Jogdand Dy. Commr. S.T. (AUR-VAT-E-003) Aurangabad appeared and made written submissions. The Preliminary hearing for admission or rejection as requested by the applicant earlier as above is again held on 01.08.2018 wherein Sh. Rohit Jain, Advocate appeared and made oral & written submissions. As per request of Joint Commissioner (Preventive) GST & Central Excise, Aurangabad an opportunity for representation and hearing is granted to them also before deciding the issue with respect to admission or rejection of application. As requested opportunity to present their side of the case was granted to CGST Commissionerate, Aurangabad wherein Sh. Sandeep Vaichal Supt. Appeared on 28.
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ied quantity (which is marginally surplus than the standard length-not usable) is known as 'delivered quantity'. Customers of the Company are entitled to avail Input Tax Credit ( ITC ) of GST charged on OF which also includes the cost of excess length The customers sell the non-usable/not marketable OF as scrap on payment of applicable GST. 3. The applicant submitted that, it is pertinent to note here that owing to global standard practices, OF is strictly required to be used in specified lengths (e.g. in the multiples of 2.1 kilometre/2.2 kilometre). However, due to practical challenges explained herein below it is not feasible to manufacture the OF at the exact length of standard specification. 4. We find that various hearings with respect to admission or rejection of the application have been held on various dates and details of the same are already produced above. 5. During the course of hearing, we find that jurisdictional officers have raised the objection with regard to
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e only. 6. We find from submission of jurisdictional authority that applicant's place of business i.e. manufacturing units at Waluj & Shendra were searched by the Central GST office Aurangabad during 2/4/2018 to 3/4/2018. We find that further inquiry and investigation proceedings by the preventive officers of GST Commissionerate, Aurangabad on the basis of searches conducted on 02.04.2018 and 03.04.2018, have also been undertaken in the form of follow-up actions the department including statements of the key persons recorded under Section 70 of the CGST Act, 2017. 7. We find that the applicant in their oral submissions before this authority has admitted to initiation of these proceedings against them by the department and have not denied initiation of these proceedings. However in their oral and written submissions their only contentions is that no proceedings for denial of admission of the ARA application can be stated to be initiated against them until Show Cause Notice in th
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of this Act are initiated in respect of the application prior to their filing of this application for Advance Ruling. 11. We find that Section 98 of the CGST Act provided as under: Section 98- Procedure on receipt of application 98. (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the concerned officer and, if necessary, call upon him to furnish the relevant records: Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the said concerned officer. (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the
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