Advance Ruling— The present appeal has been filed against the Advance Ruling order.
The Appellant owns an e-commerce portal www.myntra.com and is a major Indian fashion e-commerce company. The Appellant is engaged in the business of selling of fashion and lifestyle products through the said e-commerce portal. In furtherance of its business, the Appellant entered into an Advertising Agreement with Lenzing Singapore Pte Ltd, a company registered in Singapore, in terms of which the Appellant is providing advertisement space to Lenzing on their e-commerce portal, mobile application or any other online platform of the Appellant.
The Appellant approached the Authority for Advance Ruling (AAR) seeking a ruling on the following questions:-
a. "Whether the transaction of providing space on its web portal for advertisements provided by a foreign entity ie Lenzing Singapore Pte Ltd for a consideration, is taxable?
b. Consequently, what will be the correct classification of the services provided and rate of tax on the transaction of providing space on its web-portal for advertisements provided by a foreign entity i.e Lenzing Singapore Pte Ltd? "
The AAR gave the following ruling in respect of the above questions:-
a. No Advance ruling is given on question (a)above, as the question involves the determination of place of supply which is outside the jurisdiction of this Authority.
b. The services provided by the Applicant are classified under SAC 998365 which reads "Sale of internet Advertising Space (except on commission) " and the same is chargeable to CGST at 9% and SGST at 9% as per SL.No 21 of Notification No 11/2017 CT (Rate) dated 28-06-2017.
The Appellant is before us in appeal on the limited aspect the lower Authority's decision not to give a ruling on the issue of taxability on the grounds of lack of jurisdiction is incorrect and bad in law.
The question of taxability having been rejected by the lower Authority albeit incorrectly, without any ruling, the matter is not appealable as per the law. But considering the fact that the lower Authority's actions of not answering the question of taxability on the grounds of jurisdiction has been held as incorrect by us, we are constrained, in the interests of justice to send the matter back to the lower Authority to pronounce a ruling on the question of taxability after considering the place of supply provisions.
Held that— This authority set aside the order of the lower Authority and remand the case to the Advance Ruling Authority for a fresh consideration