2026-VIL-31-AAAR
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SGST AAAR

GST – West Bengal AAAR - Jurisdiction and maintainability of application for Advance Ruling - Scope of Advance Ruling Authority under Section 95(a) and Section 97 of CGST Act, 2017 - Appellant filed application before Appellate Authority seeking advance ruling on taxability of amounts received pursuant to settlement agreement based on arbitral awards for extra expenditure incurred during execution of hydro power plant construction contract - Whether application for advance ruling relating to completed transactions requiring factual examination and determination of tax position already adopted by the applicant could be entertained under the scheme of Advance Ruling - HELD - The institution of Advance Ruling is a distinct statutory mechanism conceived to provide certainty regarding the tax implications of transactions before disputes arise and is intended to facilitate voluntary compliance by enabling an applicant to obtain clarity regarding the GST implications of a proposed transaction or a transaction in the course of being undertaken - Section 95(a) of the CGST Act defines Advance Ruling as a decision provided by the Authority in relation to a supply of goods or services or both being undertaken or proposed to be undertaken by the applicant and the jurisdiction of the Authority is intrinsically linked with transactions which are prospective or ongoing - In the present case, the contractual work stood completed prior to 01.07.2017, the disputes were referred to arbitration culminating in an arbitral award passed in 2023, the applicant received the awarded amounts and thereafter furnished the relevant statutory return consciously treating the receipts as non-taxable before invoking the jurisdiction of the AAR - The application was not seeking advance certainty regarding a proposed or ongoing transaction but one seeking affirmation of a tax position already adopted and implementation of such opinion through filing of statutory return. Such enquiry falls squarely within the adjudicatory jurisdiction of the jurisdictional proper officer and not within the jurisdiction of the Advance Ruling Authority - The impugned ruling of the Advance Ruling Authority cannot be sustained and the application ought not to have been entertained under the scheme of Chapter XVII of the CGST Act - No final opinion has been expressed on the taxability or otherwise of the amounts and it shall be open to the jurisdictional proper officer to examine the issue independently – Ordered accordingly
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