Supplier can only seek advance ruling under GST, rules MAAR – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/news/supplier-can-only-seek-advance-ruling-under-gst-rules-maar/article37126122.ece

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Matter deals with Novartis selling trademarks to USV

Entities looking to seek advance ruling for Goods & Services Tax (GST) can take guidance from an order by Maharashtra Authority for Advance Ruling (MAAR) in a matter related to the transfer of registered trademark by pharma major Novartis to an Indian entity named USV.

Pact with Novartis

The applicant, Mumbai-based healthcare company, USV Private Limited entered into Deed of Assignment with Switzerland-based pharmaceutical company Novartis AG (NAG). Swiss company agreed to sell the rights of trademarks (namely Jalra and Jalra M). As on date of transfer, there trademarks were registered in the name of NAG under the Indian Trade Marks Act 1999 and Trade Marks Rules 2017. Indian company paid a certain sum to Swiss company and accordingly effective date for transfer of Trade Marks was December 10, 2019.

The application for advance ruling was filed on January 16, 2020. It wanted to confirm, whether the activity of transfer of registered trademarks by NAG to the applicant is a ‘supply of goods’ or ‘supply of services’ under the GST law.

MAAR noted that supply has been undertaken by Swiss company while the applicant is the recipient. It highlighted section 95 of GST law which says, “Advance Ruling means a decision provided by the Authority or the Appellate Authority on matters in relation to the supply of goods or services or both being undertaken by the applicant.”

Two conditions

Taking note from this section, MAAR says that two conditions need to be fulfilled for making an advance ruling application.

First question should be related with supply undertaken by the applicant while second question should be related with supply of goods or supply of services or both being undertaken or proposed to be undertaken by the applicant.

MAAR found that first condition is not satisfied as “NAG is undertaking the supply and not the applicant.” Secondly, while the effective date for Deed of Assignment is December 10, 2019 while date of filing application is January 16, 2020. This means “on the date of filing of the application, the subject supply was already completed and was neither being undertaken, nor was proposed to be undertaken.”

As none of the conditions was fulfilled, so MAAR rejected the application saying it is non-maintainable under the GST law.

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