No GST reverse charge shall apply on the supply of service: AAR

No GST reverse charge shall apply on the supply of service: AAR

The Odisha Authority of Advance Ruling (AAR) ruled that no Goods and Services Tax (GST) would apply on a reverse charge basis on Supply of service to Odisha Power Transmission Corporation Limited (OPTCL)

M/s Tokyo Electric Power Company Service Limited (TEPSCO) (applicant), is a Japan-based company and it is associated with Tokyo Electric Power Company, Holding Inc. The applicant had entered into an agreement on 13 April 2018 with an Indian entity Odisha Power Transmission Corporation Limited (OPTCL). According to the said agreement the consultants had agreed to provide consultancy services to M/s Odisha Transmission System Improvement Project, Odisha, India.

The applicant applied before the AAR, Odisha for seeking a ruling as to whether the Applicant is required to be registered under Odisha Goods and Services Act, 2017 (OGST Act) and Central Goods and Services Act, 2017 (CGST Act) for the consultancy services provided to OPTCL.

The matter was listed before the AAR Odisha and the Coram comprised of G.K. Pati and H.K. Mishra. They stated that the supply of service to OPTCL is not an import of service in terms Section 2(11) of the Integrated Goods and Services Tax Act, 2017 (IGST Act).

The AAR further stated that the recipient would not be held liable to pay GST on a reverse charge basis in terms of Notification No. 10/2017 – integrated Tax (Rate) dated 28 June 2017. It was clarified that the applicant is the supplier of service in India and hence it would be liable to pay tax.

The AAR held that the applicant is required to take GST registration under OGST Act, and CGST Act, for the consultancy services provided to OPTCL. It was further clarified that the ruling is valid subject to the provisions under Section 103(2) unless declared void under Section 104(1) of the GST Act.

It was also directed by the AAR, Odisha that if the applicant is aggrieved by the ruling then they may file an appeal to the Odisha State Appellate Authority for advance ruling (AAAR, Odisha) under Section 100 of the CGST/OGST Act within 30 days from the date of receipt of the advance ruling.