GST Advance Ruling on Export of Services and Refund Eligibility
The Appellate Authority for Advance Ruling in Haryana confirmed that certain service-related questions fall outside the legal scope of the advance ruling process.
- Ruling
- HAR/HAAAR/2018-19/02 dated 22.11.2018
- Authority
- Appellate Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Esprit India asked if its sourcing services qualify as zero-rated exports.
- The company sought confirmation on its eligibility for GST refunds.
- The Appellate Authority dismissed the appeal, upholding the original ruling.
- The authority ruled that these specific questions exceed the scope of Section 97(2).
In short
Esprit India Private Limited asked the Haryana tax authorities to classify its sourcing support services as exports and confirm its eligibility for GST refunds. The authorities declined to answer these specific questions, stating they fall outside the limited legal scope of what an advance ruling can address.
What has changed
How it worked before
Businesses often assumed that the advance ruling process could be used to obtain a definitive answer on any tax-related uncertainty, including broad questions about export status and refund eligibility.
What has changed
The authority clarified that the advance ruling process is strictly limited to specific matters like tax classification and valuation under Section 97(2). This means that if a business asks questions outside this narrow list, the authority will refuse to provide a ruling, regardless of the business's need for clarity.
Who this affects
Indian subsidiaries providing support services to foreign parent companies who are unsure about their export status or refund eligibility.
An example
A logistics firm in Haryana provides coordination services to a client in Singapore. They want to know if these services qualify as zero-rated exports to claim a refund. Based on this ruling, if they approach the Authority for Advance Ruling, the authority may decline to answer the question because it falls outside the scope of Section 97(2).
What you should do
Do not assume this ruling applies to your business, as an advance ruling is only binding on the company that requested it and its specific tax officer. If you have similar questions, consult a tax professional to evaluate your position rather than relying on the outcome of this specific case.
If you do nothing
If you assume this ruling provides a blanket exemption or eligibility for your own business, you risk filing incorrect tax returns. A tax officer may later reject your claims, leading to interest, penalties, and lengthy litigation. Always seek professional advice tailored to your specific facts.
The terms explained
- Advance Ruling
- A written decision provided by tax authorities to a business to clarify how GST laws apply to a specific transaction.
- Zero-rated
- A status where the supply of goods or services is taxed at a zero percent rate, allowing the business to claim a refund of taxes paid on inputs.
- Section 97(2)
- A specific part of the GST law that lists the only topics, such as tax rates or classification, on which a business can legally request an advance ruling.
The ruling in detail
Appellate Authority for Advance Ruling
M/s Esprit India Private Limited
HAR/HAAAR/2018-19/02 dated 22.11.2018 · Haryana
Questions before the authority
- Taxability of above stated services provided by Esprit India to its associate concern in Hong Kong EDCFE under GST regime.
- Whether the above stated services provided by Esprit India are covered under Export of Services having Zero rated taxability.
- Whether Esprit India is eligible for seeking refund of GST for the taxes paid on input services or goods or both.
Facts
The appellant, a subsidiary of Esprit De Corp (Far East) Limited (EDCFE), provides various sourcing support services in India to EDCFE, which in turn acts as a sourcing service provider for Esprit Germany. These services include market research, vendor evaluation, quality control, and logistics coordination. The appellant contends that these services are independent of the purchase of goods by Esprit Germany and should be treated as export of services.
Ruling
| Question | What the authority ruled |
|---|---|
| Taxability of services | The AAR correctly identified the SAC description and rate of tax. The appellate authority upheld the AAR's findings. |
| Export of services/Zero rating | Declined by the AAR as outside the scope of Section 97(2). The appellate authority agreed with the AAR's refusal to answer. |
| Eligibility for GST refund | Declined by the AAR as outside the scope of Section 97(2). The appellate authority agreed with the AAR's refusal to answer. |
The Appellate Authority upheld the original Advance Ruling, dismissing the appeal. It concluded that the AAR had correctly addressed the questions within its jurisdiction and that the appellant's arguments were untenable. The authority affirmed the findings regarding the taxability and classification of the services provided.
Reasoning
The authority reasoned that the AAR had provided a detailed and self-speaking order that addressed all relevant aspects. It observed that the appellant's questions regarding export status and refund eligibility did not fall within the **limited scope of Section 97(2)** of the CGST/HGST Act, which defines the matters on which an advance ruling can be sought. Furthermore, the authority distinguished the case laws cited by the appellant, noting that the facts and circumstances of the present case were different. It concluded that the AAR had correctly identified the SAC description and tax rate for the services provided.
Provisions relied on
- Section 97(2) of the CGST/HGST Act
- Section 100(1) of the CGST/HGST Act
- Section 101 of the CGST/HGST Act
- Section 103 of the CGST/HGST Act
For the practitioner
This ruling reinforces the **strict jurisdictional limits** of the Authority for Advance Ruling under Section 97(2). It serves as a reminder that AARs may decline to answer questions that do not strictly pertain to classification, valuation, or tax liability. Practitioners should note that the appellate authority will uphold an AAR's refusal to address broader policy or eligibility questions if they fall outside the statutory mandate.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/2024-02/haryana_haaar_2018-19_02_dtd_22.11.18.pdf
Legibility of the scan, as read: high.
Prepared 13-10-2026.
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