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2022 (11) TMI 81 - AAAR - GSTAdmissibility of appeal - time limitation - appeal not filed on time - Input Tax Credit - expenditure incurred for Civil and Interior Works - property is further used for letting out to different tenants on rental basis viz, for furtherance of business - construction of commercial complex - HELD THAT - Rule 107-A of CGST Rules, stipulates the provision for manual filing of appeal against an order issued by the Authority for Advance Ruling and this option to file appeal manually was always available with the appellant and they have ultimately filed it manually without any glitch, whatsoever. The Appellant had sufficient time to file an appeal against the said advance ruling, however, they failed to comply with the time limit prescribed under law for filing an appal against the concerned advance ruling order. Hon'ble Supreme Court in Writ Petition (C) No. 3 of 2020 dated 10.01.2020 2022 (1) TMI 385 - SC ORDER , wherein, the Hon ble Apex Court has ordered for extension of period of limitation due to COVID-19 led adverse circumstances - in view the decision of Hon'ble Court, since the impugned order was served on 12.02.2022 to the Appellant, as admitted by the Appellant in their appeal, (though in the appeal form GST ARA-2, it is written as 12.01.2022), the last date for filing an appeal would have been 30.05 2022. Further, even if the added benefit of proviso to sub-section (2) of Section 100 of CGST Act is extended to the Appellant, by considering that the Appellant was prevented by a sufficient cause from presenting the appeal within the normal period and a further period of 30 days were allowed, even then the last dale of filing appeal would be 29.06.2022. Therefore, in any foreseeable case, the last date for filing of appeal under law in the instant case was 29.06.2022. No appeal was filed by the Appellant till that date and it was finally filed only on 07.07.2022. The appeal filed by the Appellant is not admissible in eye of law - Appeal dismissed on the ground of limitation itself without going into the merits of the case.
Issues Involved:
1. Eligibility of input tax credit (ITC) for expenditure incurred on 'Civil and Interior Works' for a building used for letting out to tenants. 2. Availability of ITC on the construction of a commercial complex intended for rental purposes. 3. Procedural aspects and admissibility of the appeal filed by the appellant. Detailed Analysis: 1. Eligibility of Input Tax Credit for 'Civil and Interior Works': The appellant, engaged in renovation and civil works for letting out buildings, sought an advance ruling on whether they could claim ITC for expenses incurred on 'Civil and Interior Works' in a building used for rental purposes. The Authority for Advance Ruling (AAR) ruled that the appellant is not eligible for ITC under clauses (c) and (d) of Section 17(5) of the CGST Act, 2017, which restricts ITC for works contract services and goods/services used for constructing immovable property. The appellant argued that the expenses incurred are for furtherance of business, as the property is rented out, generating taxable rental income. They emphasized that Section 16(1) of the CGST Act allows ITC for goods and services used in the course of business. They contended that the restriction under Section 17(5) should not apply as the property is not intended for sale but for rental, thus maintaining the supply chain and generating GST revenue. 2. Availability of ITC on Construction of Commercial Complex: The appellant planned to construct a commercial complex for rental purposes and sought clarity on ITC eligibility for GST paid on construction expenses. They argued that renting out the complex qualifies as 'supply' under Section 7 read with Schedule II of the CGST Act, 2017, and thus, ITC should be allowed. They cited the Orissa High Court's decision in M/s Safari Retreats Private Limited, which supported ITC for construction expenses when the property is used for taxable rental income. The appellant highlighted that denying ITC would increase costs, which would be passed on to tenants, contradicting the GST's objective of free credit flow for business furtherance. 3. Procedural Aspects and Admissibility of the Appeal: The appellant faced procedural issues in filing the appeal, as the AAR order was not uploaded on the GST portal, preventing timely electronic filing. They manually filed the appeal after confirmation from the authority. The appeal was filed late, and the statutory fee was paid on 07.07.2022, beyond the permissible extension period. The appellate authority examined the admissibility of the appeal under Section 100 of the CGST Act, 2017, which mandates a 30-day filing period from the communication date, extendable by another 30 days for sufficient cause. The order was communicated on 12.02.2022, making the last permissible filing date 29.06.2022. The appeal, filed on 07.07.2022, was deemed inadmissible due to the lapse of the extended period. Conclusion: The appeal was dismissed on procedural grounds without delving into the merits, as it was filed beyond the legally permissible period. The appellant's arguments on ITC eligibility for 'Civil and Interior Works' and construction of a commercial complex remain unaddressed due to the appeal's inadmissibility.
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