2022 (4) TMI 1292 - AAR - GST

Maintainability of Advance Ruling application - Inward Tax Credit - inward supplies - preparation of food and beverages to be provided to the employees of the company - capital equipment used for preparation of food and beverages to be provided to the employees of the company - food and beverages supplied by an outside caterer(s) on the basis of the Tax invoice(s) raised by them and reported in the GST portal through Form GSTR-1 and reflected in Form GSTR-2 GSTR-2A - food and beverages provided in the course of company's principal business, to the workers during the working hours is to be considered as Supply or not - supply or Goods or Service? - amount collected from the employees is deemed as supply or not - levy of GST on the transportation services received from external supplier for the purpose of providing transportation facility to the employees between their residence and place of work - inward supplies of Transport Service for employees to facilitate their travel from the place of residence to the place of work and back, to perform the work of the company in the course of its business - provision of food, beverage and / or transportation by the employer to the employee is done in the course of the principal business of the applicant company (employer) which would have a influential role in the furtherance of its business or not?. HELD THAT - The conditions to be considered before admission of application, on the basis of above proviso are whether the question/s raised is/are (i) pending or decided in any proceedings (ii) in the case of applicant (iii) under any provisions of this Act. It is observed on examination of the records that the issues/questions raised by the applicant in the instant application have already been taken up by the audit team, in the case of applicant under the provisions of the CGST Act 2017. From the audit report mentioned, it is evident that the impugned issues have already been decided in the audit proceedings. Further the fact that the unit was subjected to audit proceedings was admitted during the hearing. The issues raised in the instant application and the issues decided under the audit proceedings are one and same. Thus first proviso to Section 98(2) of the CGST Act 2017 is squarely applicable to the instant case - the application is rejected as inadmissible , in terms of first proviso to Section 98(2) of the CGST Act 2017.

Summary

Issues:
1. Applicability of GST on food and beverage facilities provided by the applicant.
2. Eligibility for Input Tax Credit on various supplies.
3. Classification of food and beverage provision as a taxable supply.
4. Applicability of GST on transportation services for employees.
5. Consideration of the net cost as part of the principal business.

Analysis:
The applicant, engaged in pharmaceutical manufacturing, sought an advance ruling on several issues related to GST applicability on their business operations. They inquired about Input Tax Credit availability on inward supplies for food and beverages, capital equipment, and services from external caterers. Additionally, they questioned the treatment of food provision to employees during working hours as a taxable supply and the GST implications on amounts collected from employees. The applicant also sought clarity on GST applicability on transportation services provided to employees and Input Tax Credit eligibility for such services.

During the personal hearing, it was revealed that the issues raised in the application were already under audit by the Central Tax Audit-I Commissionerate, Bengaluru, for the period 01.07.2017 to 31.03.2020. The audit team had addressed the same concerns, and the applicant had agreed to the audit findings, paying the applicable GST, interest, and penalties. The Authority noted that the questions raised in the application were already decided in the audit proceedings, making the application inadmissible under the first proviso to Section 98(2) of the CGST Act 2017.

Considering the above, the Authority rejected the application as "inadmissible" based on the first proviso to Section 98(2) of the CGST Act 2017. The issues raised by the applicant had already been addressed and decided during the audit proceedings, rendering the advance ruling application redundant.