Classification of service— An application, for Advance Ruling was filed by the applicant, seeking an advance ruling in respect of certain questions.
The application was decided by this office as per Order no. 60/2020-21/B-116 43 TAXLOK.COM 065 dated 21/12/2021. Later, it was noticed that a circular dated 6/10/2021 remained to be considered while passing the said order and the applicant had not pointed out the said circular at the time of final hearing in respect of the said order passed on 12/12/2021.
Therefore, this office served the impugned notice on the applicant and the case was fixed for hearing on 15/3/2022. The applicant requested for extension of the hearing date by one more month.
The Company had entered into Operator Agreement dated 25.02.2020 with the Navi Mumbai Transport Undertaking (hereinafter referred to as “NMMT”). In terms of the Agreement, the Company was responsible to procure and supply air-conditioned electric buses to NMMT on gross contract basis which will be plied on the routes identified by NMMT. During the term of the Agreement, the ownership of the buses as well as responsibility of maintenance of the buses remained vested with the Company.
The applicant had on 19.12.2020 filed an application seeking an advance ruling under section 97 of the Central Goods and Service Tax Act, 2017, to determine the appropriate classification of these services along with taxability thereof.
The Ruling in respect of the Company's Application was delivered vide Order doted 22.12.2021 which ruled that the services of the Company were classifiable under SI. No. 10(i) of the Notification No. 11/2017-Central Tax (Rate) dated 28.05.2017 (“Rate Notification”) which covered the services of “Renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient.”. Further, it was held that (SI. No. 22 of) Notification No. 12/2017-Central Tax Rate dated 28.06.2017 was not applicable.
However Company is now in receipt of the captioned Notice which has been issued under Section 102 and 104 of the CGST Act. The Notice requires the Company to show cause as to why the decision given in the vide Order dated 22.12.2021 should not be withdrawn.
Held that— This Authority directs the applicant to follow the provisions of the circular which is of prior date than the date of the decision of this Authority in the earlier ARA order dated 21.12.2021. The grounds raised during present hearing by the applicant are merely and purely of technical nature and in substance the facts of the present case warrant application of the said circular. The technical objections are also not founded on sound principles of law because, if one reads the texts of above sections, under which present order is being passed, a reasonable mind will come to conclusion that there is no merit in the objections taken by the applicant. Hence, answers to the questions are required to be modified as per the views put forth by the CBIC in the impugned Circular.
Services provided by the applicant to NMMT under the Agreement, by way of supplying, operating and maintaining air-conditioned electrically operated buses are exempt from GST.