2020 (7) TMI 411 - AAR - GST

Input tax credit - goods/services received for construction of hotel building - work contract service received for construction of hotel building - goods/services received for construction of banquet hall which is rented further to customer - work contract service received for construction of banquet hall which is rented further to customer - scope of plant machinery - inclusion of hotel/banquet under section 17 - specified goods viz. Lifts, sanitary items, under ground cables etc - reverse charge mechanism. HELD THAT - Since applicant has sought advance ruling on admissibility of input tax credit of tax paid or deemed to have been paid , therefore, in terms of said Section 97(2)(d) of the Act, the application filed by the applicant was admitted - Thus authority was of the view that before deciding the application, the fate of said writ petition, whether admitted or otherwise, shall be considered and if any issue is there, notice will be issued and personal hearing would be given. The authority shall not admit the application where the question raised in the application is pending or decided in any proceedings of an applicant under any of the provisions of this Act. No application shall be rejected under this sub section unless the opportunity of hearing given to the applicant. Where the application is rejected reasons of such rejection shall be specified in the order - as per applicant s argument their application can be admitted in as much as no case is pending before Hon ble Court in the name of the applicant on the issue in hand. In this context we find that applicant has been defined under Section 95(c) of the Act which means any person registered or desirous of obtaining registration under this Act. All the cases are pending in respective courts on the same issue and thus matter is sub-judice - Application rejected.

Summary

Issues:
Admissibility of input tax credit on goods/services for construction of hotel and banquet hall.

Analysis:
The application sought advance ruling on input tax credit (ITC) for constructing a hotel and banquet hall. The applicant questioned whether ITC on goods/services received for construction is available, including work contract services. The applicant also inquired about the inclusion of 'plant & machinery' under section 17 for ITC eligibility. The ruling authority examined the scope of advance ruling under GST, which covers matters like classification, applicability of notifications, input tax credit, and liability to pay tax. The application was admitted for hearing based on the admissibility of ITC, as per Section 97(2)(d) of the Act.

The authority noted that a similar issue was raised in a writ petition before the High Court of Uttarakhand by another entity. The authority decided to consider the outcome of that petition before making a ruling. A notice was issued to the applicant to show cause why their application should not be rejected. During the hearing, the applicant argued for the admissibility of ITC based on legal provisions and precedents. The applicant emphasized the importance of advance rulings in clarifying tax positions and highlighted the binding nature of rulings until a change in law occurs.

Upon reviewing the records, the authority found that the issue of ITC admissibility for construction was already under consideration by different courts. The applicant's argument that no case was pending specifically in their name was countered by the definition of 'applicant' under the Act, which includes any registered person. The authority concluded that since similar cases were sub-judice in various courts, the applicant's application was rejected under Section 98(2) of the Act. This decision was based on the provision that the authority shall not admit applications where the question raised is pending or decided in any proceedings related to the Act.

In summary, the ruling authority rejected the application for advance ruling on the admissibility of input tax credit for construction activities due to the issue being sub-judice in other court cases. The decision was made in accordance with the legal provisions that prevent the admission of applications where the question raised is already under consideration in other proceedings.