Breif Issue :

Facts  & Issue Of The Case :

The appeal is filed against the Order No.26/AAR/2019 passed by the Tamil Nadu State Authority for Advance ruling on the application for advance ruling filed by the appellant. As the ruling given by advance ruling authority that the applicant will not be eligible for full ITC as per proviso to Section 16(2), as they are not paying the full amount to their supplier SML HO, rather net amount is being paid. Accordingly, the Hon’ble AAR, Tamil Nadu held that, supplies received from SML HO is not eligible for the full ITC. Rather ITC shall not be available to the extent specified in the restrictions as per second proviso Section 16(2) of CGST Act read with Rule 37 of CGST Rules, 2017.

Following AAAR can be referred in context to the decision made in the AAR GIB/TN/SANGHVI MOVERS/21.06.2019/AAR-194, M/s. Sanghvi Movers Ltd is engaged in the business of providing medium-sized heavy-duty cranes on wet-lease basis i.e. Own, Operate and Maintain and provide entire operating crew, such as crane operators, riggers, helpers, technicians, engineers, etc . The transaction is between distinct persons. The appellant in the tax invoice raised on their customers mentions that the payment to be made either by Cheque/DD in the name of 'SANGHVI MOVERS LIMITED' or directly to the account of SML HO at Pune.

The appellant has represented that the receipts and payables are accounted at the entity level only. The HO being distinct person in the eyes of law and the transaction is in the course of furtherance of business, the supply is taxable supply for which SML HO has adopted a value agreed under the 'Pricing' clause of the MOU and paid the tax on the value declared in the Invoice.