2024 (10) TMI 1377 - AAAR - GST

Maintainability of advance ruling application - Admissibility of input tax credit - tax paid or deemed to have been paid on construction materials used in the construction of Marriage Convention hall - tax paid on inward supplies of D.G. Sets, Air Conditioners, Furnitures, Chairs etc., used in the course of business of letting out of Marriage / Convention halls - HELD THAT - The first proviso to Section 98(2) stipulates that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of the CGST Act 2017. In the instant case the questions, on which the applicant seeks advance ruling, are already pending in the proceedings of show cause notice under the provisions of the CGST / KGST Act 2017. Thus the instant application is liable for rejection in terms of first proviso to Section 98(2) of the CGST/KGST Act 2017. The application filed by the Applicant for advance ruling is rejected, in terms of first proviso of section 98(2) of the CGST Act 2017.

Summary

Issues:
- Admissibility of input tax credit on construction materials for a marriage/convention hall.
- Admissibility of input tax credit on inward supplies for letting out marriage/convention halls.
- Maintainability of the advance ruling application.

Analysis:
The Applicant, engaged in renting out a marriage/convention hall, sought an advance ruling on the admissibility of input tax credit on construction materials and inward supplies. The Applicant appeared for personal hearing proceedings but failed to attend subsequent hearings despite multiple opportunities. The Authority noted the similarity between provisions of the CGST Act and KGST Act unless specifically mentioned otherwise. The Authority considered the Applicant's submissions and sought to determine the maintainability of the application.

Upon review, it was found that a show cause notice had been issued to the Applicant for recovery of ineligible credit before the advance ruling application was filed. The Applicant had provided incorrect information in the application, stating that the questions raised were not pending in any proceedings, thereby suppressing the show cause notice. Citing Section 98(2) of the CGST Act 2017, the Authority concluded that the application could not be admitted as the questions raised were already pending in the show cause notice proceedings under the Act.

Consequently, the Authority rejected the Applicant's advance ruling application based on the first proviso of Section 98(2) of the CGST Act 2017. The decision was made due to the pending nature of the questions raised in the application in the show cause notice proceedings, rendering the application non-maintainable.