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Only supplier of goods or services can apply for a GST advance ruling.
The GST Authority for Advance Rulings (Maharashtra) has recently rejected an application as it was not filed by the supplier of goods or services, but by the recipient. Second, it related to a supply that had already been completed - as on the date of the application and not a supply which was being undertaken or proposed to be undertaken.
In this case, a Mumbai based private company – USV Pvt Ltd, had entered into an assignment deed dated November 30, 2019, with Novartis AG, a Switzerland based pharma company. The latter had agreed to permanently transfer the trademark rights related to the Indian territory for ‘Jalra’ and ‘Jalra M’.
The effective date of the transfer, was either December 10, 2019 or the date of the receipt of the entire consideration by the Swiss company, whichever is later. USV Pvt Ltd, paid full consideration in two tranches, before this date.
It filed an application with the AAR on whether, the activity of transfer of the registered trademarks by Novartis AG to itself, was a supply of goods or a supply of services? Other questions on which the ruling was sought, stemmed from the first one.
The AAR pointed out that there are two conditions to be fulfilled for making an advance ruling application: Firstly, the question asked should be in relation to supply undertaken by the ‘Applicant’. Secondly the question should be in relation to the supply of goods or services or both ‘being undertaken or proposed to be undertaken by the applicant’.
In this case, it was Novartis AG which was undertaking the supply. Thus, the first condition was not met.
Second, the effective date of the transfer of the trademark was December 10, 2019 whereas the application was filed on January 16, 2020. Thus, on the date of filing the supply was already completed.
The applicant and the application did not meet the conditions prescribed under the GST law and hence the application was rejected.
