2022-VIL-88-AAAR

SGST AAAR

GST – Karnataka AAAR - Section 97(2) of the CGST Act, 2017 - Appellant provides space on its web portal for a consideration for advertisements by a foreign entity – appellant sought advance ruling on whether the transaction with the foreign entity is taxable under GST and also what is the classification of the service as well as the rate of tax - AAR held that the service of providing advertising space on the web portal for a consideration will be classifiable under SAC 998365 as “Sale of internet Advertising Space (except on commission)” and liable to 18% GST - On the issue of whether the activity of providing advertising space on their web portal to a foreign entity is taxable under GST, the AAR did not give any ruling citing the reason that the question involves determination of place of supply which is outside the jurisdiction of the Authority - Appellant is 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 – HELD - while determination of place of supply per se is conspicuously absent in the list of issues enumerated under Section 97(2), in certain situations, the liability to pay tax or otherwise is dependent on the place of supply and in such cases, the determination of tax liability inevitably involves a determination of place of supply - clause (e) of Section 97(2) covers within its scope the determination of place of supply if such determination is linked with the liability to pay tax and in such cases the Authority has the jurisdiction to pass a ruling on the issue of place of supply - the lower Authority was incorrect in not passing a ruling on the question of taxability of the transaction of selling advertising space on its web portal to a foreign entity - the order of the lower Authority is set aside and matter remanded to the Advance Ruling Authority for a fresh consideration – Ordered accordingly - Scope of Section 101(1) of the CGST Act, 2017 – HELD - In the instant case, there is no ruling pronounced by the lower Authority on the question of taxability. In the absence of a ruling, there is nothing for this Authority to confirm or modify - disagree with the Appellant’s contention that this authority has to go beyond and decide the point on merits when there has been no ruling by the lower Authority - The fact that only a ruling pronounced in an order issued under Section 98(4) is appealable before us justifies the stand that ‘modifying’ does not include answering the unanswered question

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