9911796707
TMI Blog2018 (9) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... tax credit shall not be available. The explanation removes any kind of ambiguity on the issue. Ruling:- The Applicant is not entitled to pay the GST @ 18% with input tax credit as the services being offered by the Applicant are classified under a heading attracting GST @ 5%, without input tax credit. X X X X Extracts X X X X X X X X Extracts X X X X ..... Government. 5.2 Under the Notification, availment of concessional rate of tax @5% is subject to the condition that the input tax credit is not availed. If the condition is not fulfilled, then the concessional rate will not apply. The phrase "provided that" signifies that a particular thing must happen before another thing can happen. The applicant intend to rely on the judgment of the Hon'ble Supreme Court in the case of State of Kerala Vs Builders Association of India [(1997)104 STC 134 (SC)] = 1996 (11) TMI 355 - SUPREME COURT OF INDIA]. 5.3 Holding the notification under reference as mandatory would render it being violative of Article 14 of the Constitution of India (which guarantees equality before law) and violative of Section 16(1) of CGST Act'2017, which provides for input tax credit. 5.4 Restaurants inside Five Star hotels will be eligible for input tax credit. This would mean that persons consuming it there would end up paying lower than what they pay in stand alone restaurants, which have to treat the tax paid on inputs & input services as cost of supplies being made. 5.5 Reduction is made by invoking the powers in Section 9, which does not confer any power to reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and non-alcoholic beverages to airlines and other transportation operators 87 996337 Other contract food services 88 996339 Other food, edible preparations, alcoholic and non-alcoholic beverages serving services nowhere else classified The classification of the services rendered by the applicant is, therefore, clearly defined under Service Code (Tariff) 996331. Notification No. 11/2017Central Tax (Rate) dated 28th June 2017 notifies the rate of central tax in column 4 on the intra-State supply of services of description as specified in column (3) of the Table in the notification, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2). 8.2 The restaurant services provided by the applicant are squarely covered under serial number 7 of the aforesaid Notification. 8.3 The entries at serial number 7 of the aforesaid Notification were amended through Notification No 46/2017 -Central Tax (Rate) dated 14th November, 2017 levying a central tax of 2.5% on restaurant services as provided by the applicant under the condition that credit of input tax charged on goods and services used in supplying the service have not been taken. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be levied at the rate as specified under this entry."; 8.4 The applicant contends that the words 'provided that' used in column 5 signify that a particular thing must happen before another thing can happen. It is also contended that the concessional rate of 5 % (2.5% CGST and 2.5% SGST) is subject to the condition that the input tax credit is not availed. If the condition is not fulfilled then the concessional rate will not apply. They further contend that in the event the concessional rate does not apply then their services would be covered under Serial number 35 of Notification 11/2017-Central Tax (Rate) dated 28th June 2017. This would require them to discharge tax at the rate of 18% and also entitle them to avail input tax credit. 8.5 The entry at serial no. 35 of Notification 11/2017-Central Tax (Rate) dated 28th June 2017 is as follows: 35 Heading 9997 Other services (washing, cleaning and dyeing services; beauty and physical well -being services; and other miscellaneous services including services nowhere else classified). 9 - The various services covered under the scope of Heading 9997 as per the Annexure to Notification 11/2017 are reproduced below for refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the question raised by the applicant lies in determining the classification of the services rendered by them. 9.1 The extract of the Annexure to Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017, as reproduced in para 7.1 above, indicates that food and beverage services fall under Heading 9963, Group 99633 and Service Code (Tariff) 996331. It is thus evident that the services rendered by the applicant are clearly defined under Heading 9963. The tax rate for the services under Heading 9963 is 5% (CSGT 2.5% and SGST 2.5%) in terms of Notification 46/2017-Central Tax (Rate) dated 14th November, 2017.The competing entry claimed by the applicant is Serial Number 35 of Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017. The applicable tax rate is 18% for this entry. The extract of the entry is reproduced in para 7.5 above. This entry is applicable for services which are not specifically described under any other entry in the Annexure. The services provided by the applicant are classifiable under Heading 9963 and such services covered under heading 9963 are squarely covered under serial number 7 of the Notification. As the services provided by the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X
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