Section 106 of GST – Procedure of Authority and Appellate Authority

Section 106 of GST – Procedure of Authority and Appellate Authority. In this GST Section you may find Complete details for Procedure of Authority and Appellate Authority as per GST Act 2017Detailed Analysis of GST Section 106 of GST Act 2017.

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Section 106 of GST – Procedure of Authority and Appellate Authority

Statutory Provision

The Authority or the Appellate Authority shall, subject to the provisions of this Chapter, have power to regulate its own procedure.

Analysis and Updates


It seeks to empower the AAR and the Appellate Authority to regulate its own procedure.


The Authorities shall have the power to regulate their own procedure.

Comparative review

The powers remain exactly the same as are contained in section 23H of Central Excise Act, section 28L of Customs Act and section 96H of the Finance Act.

Various states have constituted the Advance Ruling Authority and are issuing the Advance Ruling clarification on various issues under the GST Act. There is no provision stating that the Advance Ruling clarified in one state is applicable to all the states and union Territories. There is possibility of difference Advance Ruling by different states and accordingly it will be applicable to respective states only unless the different ruling is issued by the respective state. The Advance Ruling Authority should be common for all the states and union territories to reduce the disparity and to bring uniformity in the GST law.

Some of the advance rulings pronounced by different AAAR seems to be in contradiction to the intention of the Government’s “ease of doing business” such as,-

“In case of West Bengal AAR it was held that marketing services provided to foreign universities does not qualify as export. It is an intermediary service and therefore GST should be levied. However, as per place of supply provisions and other criteria, it seemed to meet the requirements for qualifying as an export.

Similarly, goods sold at duty free shops were held to be taxable by the Delhi AAR. Such sale has historically been considered an export and is ‘duty’ free, a clear departure from set precedents. In another case, Maharashtra AAR held that solar procurement and installation contracts will attract 18% GST, while Karnataka AAR ruled a 5% GST rate,

The Karnataka Appellate Authority for Advance Rulings has upheld the levy of goods and services tax on services rendered by one office branch to other centres. In-house service functions such as human resources and payrolls, if carried out from a centre in one state for offices in other states, will attract GST for which it will have to issue an invoice. A large business based in New Delhi with centralised finance, IT and HR functions for branches across states would be deemed to be providing support services to the other locations and would need to raise invoices charging GST. Officials said that while the Centre is of the view that a single authority should be formed, states are not coming on board as of now. The council is likely to seek a consensus on this issue.

According to the advance ruling pronounced by the Maharashtra AAAR, companies providing offshore support services to multinationals are liable to pay the 18% GST levy on their revenues. Going by the tax department’s definition, it appears that companies are mere intermediaries and not exporters.

Companies assisting foreign companies with back office support functions such as accounting and legal shall not qualify as exporters but shall be treated as intermediaries and shall be liable to pay IGST @ 18%. While there have been contradicting rulings on the aspect of ‘intermediary’ versus ‘back office support’, it must be taken note of that each ruling is based on the peculiar facts presented by the respective applicant. Outcome of these rulings cannot be generalized to stir up anxiety in the BPO industry in which India is a major global player. Concept of intermediary is well brought out in circular 57/31/2018-GST dated 04.09.2018, though in the context of schedule I supplies, it is very much relevant to understand the scope of section 13(8) of IGST. Once Government has accepted the authority of jurisprudence under section 182 of Indian Contract Act, 1872 understand scope of agency, it cannot be valid only in the context of schedule I and not applicable in other contexts. Agent is essentially one where there is ‘delegated authority’ and person is ‘detached from consequences’. When such cardinal tests are applied, there cannot be any doubt about whether the role played is that or agency or not. Mere title like back office support is not sufficient to bring the transaction into the operation of section 13(8) of IGST Act and deny export benefit.

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