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TMI Blog2019 (11) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... icant himself has already stated that his application for refund of unutilized input tax credit relatable to services is rejected by the jurisdictional authority. Since the jurisdictional refunding authority is an adjudicating authority and any decision by him is appealable under the Act before the concerned appellate authority and advance ruling authority is not the forum before such issue can be raised and in view of the above, the application is not maintainable on this account itself. Further, it is seen during the arguments, the vires of the rules are questioned and it is not within the scope of this authority for advance ruling. Appeal rejected as being not maintainable. - KAR ADRG 50/2019 - - - Dated:- 18-9-2019 - SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER Represented by : Sri Shivarajan, Charted Accountant ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS SERVICES TAX ACT, 2017 AND UNDER 98(4) OF THE KARNATAKA GOODS SERVICES TAX ACT, 2017 1. M/s N Ranga Rao Sons Pvt Ltd, (called as the Applicant hereinafter), having GSTIN number 29AAECN8103G1ZH, has filed an application for Advance Ruling under Section 97 of CGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inverted rated supply of goods Explanation .- For the purposes of this sub-rule, the expressions Net ITC and Adjusted Total turnover shall have the same meaning as assigned to them in sub-rule (4). The applicant states that Net ITC means input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which the refund is claimed under sub-rules (4A) or (4B) or both. From the above, the applicant claims that in terms of Rule 89(5) of the CGST Rules, as it was introduced w.e.f. July 1st, 2017, it was provided that while calculating net input tax credit, the same would mean input tax credit availed on inputs and input services. Accordingly, the applicant, it is stated, had in line with the above provision was claiming refund of accumulated input tax credits on inputs and input services. e. However, the applicant states, in the month of April 2018, vide Notification No.21/2018 - Central Tax dated April 18, 2018, the definition of Net ITC was provided specifically under Rule 89(5) and the same was defined as follows:- (5) In the case of refund on account of invert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o,- (a) .............................. (b) Refund of unutilized input tax credit under sub-section (3) On a plain reading of the above provision, it is evident that the Act does not prescribe any embargo on the refund of input tax credits, be it inputs or input services. 6. The applicant claims that Rule 89(5) of the CGST Rules, as amended, places an unreasonable restriction on claiming of refund of unutilized input tax credit, to the extent it relates to input services which was never the intention of the law makers as evident from the framing of Section 54(3) of the CGST Act. It has been held in various fora that the Rules operate within the body of the Act and can never overrule the Act. Accordingly, the applicant claims that the Rule 89(5) of the CGST Rules is ultra-vires the provisions of Section 54(3) of the CGST Act. 7. In view of the above analysis, the applicant claims that it is evident that the Notifications substituting Rule 89(5) and making it effectively retrospectively i.e. Notification No.21/2018-Central Tax read with Notification No.26/2018 - Central Tax is violative of the provisions of the CGST Act and accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. He also argued that Section 97 of the CGST Act prescribes a list of the questions which can be considered by an authority of advance rulings. Section 97(2)(b) mentions that the questions on which an advance ruling can be sought is on the applicability of a notification issued under the provisions of the Act . Section 97(2)(b) provides for seeking clarification on the applicability of a notification. He also submits that the clarification to be sought under this sub-clause (b) shall cover two fold aspects:- (a) situations / Circumstances determining the applicability of a Notification; and (b) the manner of application of the Notification. Since the expression used under section 97(b) applicability of a Notification is very wide, it includes within its ambit the manner of application of a particular notification within its spectrum as well. The applicant by way of the present application therefore wishes to understand the manner of applicability of the Notification in the facts and circumstances of their case where the applicant has accumulated credit on account of both input and input services which are used in the manufacture of fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s why details of input services are sought when no refund of the same is going to be granted. He also states that even in the erstwhile laws the assessees were granted refund of entire CENVAT credit where it was not possible to utilize such accumulated credit especially in situations where there is a closure of unit, factory, etc. 19. The applicant has also questioned whether the retrospective amendment made is applicable to his case where the right for refund had already accrued to him before the amendment and whether the notification can be applied to the supplies made before the amendment. 20. FINDINGS DISCUSSION: 20.1 We have considered the submissions made by the Applicant in their application for advance ruling as well as the additional submissions made by Sri. Sri Shivarajan, Charted Accountant, during the personal hearing. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts. 20.2 As per provisions of Section 2(59) of CGST Act input means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business, input tax defines un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. As far as the applicability of a notification, this is already stated in the above paragraph itself. 20.4 Regarding the issue of refund, the applicant himself has already stated that his application for refund of unutilized input tax credit relatable to services is rejected by the jurisdictional authority. Section 107 which deals with the Appeals to the appellate authority reads as under:- 107. (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. Clause (4) of section 2 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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