The application for advance ruling of M/s. Pon Pure Chemical India Pvt. Ltd. was heard on 17.10.2017 on the issue as to whether the application is fit for admission or not. Shri Shivrajan Kalyanaraman was requested on that day to submit the reasons / provisions on following issues by 23/25.10.2017.
(i) Whether the authority is within jurisdiction to admit application especially on the issue of ‘place of supply’?
(ii) Whether the issue is related to Customs or is related to Goods and Services Tax?
2. The applicant has filed its further submission on 25.10.2017, kept in record as Annexure-‘A’. This order is being passed after taking into consideration the submissions in Annexure-‘A’.
3. Section 97(2) of the Central Goods and Services Tax Act, 2017 (herein after referred to as the ‘CGST Act, 2017’) and Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the ‘GGST Act, 2017’) empowers the Advance Ruling Authority to decide the issues, which are as follows :-
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
No other issue can be decided by the Advance Ruling Authority and therefore the Acts limit the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2).
4. The taxability on High Sea Sales requires the determination of occurrence of High Seas Sales. High Seas Sales are the sales taking place prior to the imported goods crossing the Customs frontier. The definition of “import of goods” as per Section 2(10) of the Integrated Goods and Services Tax Act, 2017 (herein after referred to as the ‘IGST Act, 2017’) is as follows :-
2(10) “import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India;
So, the import as well as High Sea Sales are determined on two basic questions of fact – (i) where the goods are and (ii) at what time the goods can be called to be entering into India. Both the above questions can be determined under the IGST Act, 2017 as per Section 7 of the IGST Act, 2017, which is for ‘place of supply’. As the ‘place of supply’ is not covered by Section 97(2) of the Acts, this authority is helpless to answer the questions raised in the application, as it is lacking jurisdiction to decide the issues.
5. The applicant itself in its application in reply to second query has stated as under :-
“However, the question before the Advance Ruling Authority is whether the supply by the PPC to the high sea or in-bond buyer- is also leviable to IGST under sub-section (1) of section 5 of the IGST Act since same supplies are subject to IGST on import under the proviso to Section 5(1) of IGST read with section 3(7) of IGST Act.”
So the applicant is well aware that the issue is related to place of supply
6. In addition to the above, it is also found that the question raised in the application for advance ruling pertains to the Customs’ domain and not to the Goods and Services Tax domain. This fact is bolstered by the proviso to sub-section (1) of Section 5 of the IGST Act, 2017, which reads as under :-
“Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962).”
It is also observed that the Central Board of Excise and Customs has issued Circular No. 33/2017-Cus dated 01.08.2017, on the issue of High Sea Sales. Thus, the issue of High Sea Sale falls in the domain of Customs and not under the Goods and Services Tax.
7. The application is therefore rejected without going into the merits of the case, on the issue of lack of jurisdiction, at the stage of admission.
The application for Advance Ruling dated 01.08.2017 of M/s. Pon Pure Chemical India Private Limited is rejected, under sub-section (2) of section 98 of the CGST Act, 2017 and the GGST Act, 2017.