Both returns filed before ST and IT authorities showed zero income meaning thereby that applicant had not commenced any activity whatsoever - on proposed services , advance ruling can be sought : AAR
By TIOL News Service
NEW DELHI, FEB 22, 2016: THE applicant is before the Authority for Advance Rulings and has raised questions in respect of the 'proposed services' that the applicant proposes to offer to its foreign clients. Those services are regarding the analysis of the drugs and market survey etc.
Revenue takes objection to the admissibility on the ground that it is not a "proposed activity" as covered under Section 96(D) of FA, 1994 since the company is incorporated on 18.11.2011 and has been filing Income Tax as well as Service Tax Returns from time to time during all these years.
The second objection raised by the Revenue is that there is a sister concern of the applicant which shares with the applicant an e-mail address as also the postal address and in case of that concern, some orders have been passed by the Service Tax Authorities.
In response to the first objection of maintainability, the applicant pointed out that though they have been filing Returns from time to time but there is no activity whatsoever. In the sense that, in both the Returns i.e. before the Service Tax Authority and before the Income Tax Authorities, it is showing zero income meaning thereby that the applicant had not commenced any activity whatsoever.
As regards the secondary objection regarding sister concern, the applicant relied on the Gujarat High Court Judgment in the case of GSPL India Transco Ltd. - 2012-TIOL-665-HC-AHM-ST wherein the same point had been considered and it is held that subsidiary company falls within the definition of the term "applicant" in terms of section 96A(b) of the Finance Act, 1994 and is competent to move an application under section 96C and is entitled to obtain Advance Ruling on its own. The recent AAR ruling in the case of GSPL India Transco Limited in 2015 (i.e. No. 40 STR-393/2015(AAR) - 2015-TIOL-02-ARA-ST where an identical question has been considered is also adverted to.
Taking note of the above decisions on the subject matter, the Authority admitted the application.
(See 2016-TIOL-04-ARA-ST)
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