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The Calcutta High Court recently made a landmark ruling in favour of recipients of services under the Goods and Services Tax (GST) regime. The ruling states that recipients of services are entitled to seek advance rulings under GST, just like suppliers of goods and services.
The case before the court involved a company that had sought an advance ruling from the GST Authority on whether the service provided by their supplier was taxable or not. The GST Authority declined to entertain the application on the grounds that the recipient of service was not eligible to seek an advance ruling under GST.
The company challenged this decision in court, arguing that the provisions of the GST Act clearly stated that any person, whether a supplier or recipient of goods or services, could seek an advance ruling. The company also argued that the GST Authority's decision was arbitrary and violated their right to due process.
The Calcutta High Court agreed with the company's arguments and ruled that the recipient of service was indeed entitled to seek an advance ruling under GST. The court noted that the GST Act did not make any distinction between suppliers and recipients of goods or services when it came to seeking advance rulings.
The court also held that denying recipients of services the right to seek advance rulings under GST would defeat the purpose of the advance ruling mechanism. The mechanism is meant to provide clarity and certainty to taxpayers on the tax implications of their transactions. Allowing only suppliers to seek advance rulings would mean that recipients would be left in the dark about the tax implications of the services they receive, leading to confusion and disputes.
The ruling of the Calcutta High Court is a significant development in the GST regime, as it clarifies the rights of recipients of services under the law. It also underscores the importance of due process and the rule of law in tax administration. Going forward, recipients of services can now seek advance rulings from the GST Authority with confidence, knowing that they have the legal right to do so.
For any further doubt on matters related to GST law, it’s compliance and advisory, feel free to contact ASC Group.
Source: The Hindu (Business Line)
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