Understanding GST Advance Rulings for Completed Contracts: Key Insights

Background

In 2013, M/s Continental Engineering Corporation entered into a contract with Jaipur Metro Rail Corporation Ltd (JMRC) for the construction of a metro system in Jaipur. Although the project was initially slated for completion in 2016, it was ultimately finished in March 2020 due to considerable delays.

Applicant’s Queries to AAR

The applicant approached the Authority for Advance Rulings (AAR) to obtain clarity on several matters:

• Taxability of additional costs incurred due to the extended contract period.
• Classification of services under Goods and Services Tax (GST).
• Timing for issuing invoices or debit notes.
• Determining the time of supply when final consideration was not settled.

AAR Rajasthan’s Findings

The AAR concluded its assessment based on Section 95(a) of the CGST Act, 2017, which limits advance rulings to supplies that are either current or proposed by the applicant.

Since the queries raised by the applicant pertained to supplies that were already completed by March 15, 2020, and the application was filed on October 21, 2021, the AAR dismissed the application for being non-maintainable. Advance rulings cannot be requested for supplies completed prior to the application date.

Key Legal Principles

• Restriction on Advance Ruling: Advance ruling requests can only relate to supplies that are currently being undertaken or planned.
• No Merits Addressed: The AAR refrained from addressing substantive GST questions due to a lack of jurisdiction regarding past supplies.
• Binding Nature: The advance rulings are only binding on the applicant and the jurisdictional officer, and only for the specific transaction under consideration.

What Should Taxpayers Do for Past Supplies?

For issues concerning taxability, service classification, or supply timing related to past transactions, taxpayers are advised to engage in regular adjudication or appeals processes rather than seeking advance rulings.

FAQs

• Q: Can advance ruling be sought for supplies already completed before the application date?
  A: No, advance rulings under GST are limited to supplies that are being undertaken or proposed at the time of application.

• Q: What is the legal basis for this restriction?
  A: Section 95(a) of the CGST Act, 2017 specifies the scope of advance rulings, which excludes past supplies.

• Q: What should taxpayers do for GST disputes on past supplies?
  A: Such disputes should be resolved through GST adjudication, appeals, or litigation.