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TMI Blog2024 (3) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 which stipulates that where the goods or services or both are used by the registered person partially for effecting taxable supplies including zero-rated supplies and partially for exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies applies to the applicant. The service of leasing of pumps and equipment received by them are undoubtedly common input services that are used for taxable as well as the exempted supplies. Therefore, the applicant is not eligible for credit of the full amount of tax paid on the License Fee Recovery for the service of leasing of pumps and equipment received by them; but only eligible to avail the amount of input tax credit determined as per the provisions contained in Rule 42 of the CGST Rules, 2017. - SMT. RAJESWARI. R. NAIR, IRS SHRI. ABDUL LATHEEF, K, MEMBER Authorized Representative : Smt. Deepa Praveen, Chartered Accountant 1. Kwality Auto Services, N.H. 47 Byepass, Vyttila. PO, Kochi (herein after referred to as the applicant ) is a retail dealer of Hindustan Petroleum Corporation Ltd and is engaged in the sales of petrol and petroleu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the jurisdictional officer as per provisions of section 98(1) of the Act. The Jurisdictional Officer submitted that the question raised by the applicant for Advance ruling is not pending or decided in any proceedings by that office. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 19.04.2023 by Virtual Mode. Smt. Deepa Praveen, Chartered Accountant represented the applicant for personal hearing. The representative reiterated the contentions made in the application and requested to issue the ruling on the basis of the submissions made in the application. 7. Discussion and Conclusion: 7.1. We have carefully considered the Advance ruling application, statement of facts and the oral submissions made at the time of hearing. The questions raised by the applicant are on the admissibility of input tax credit on the service of leasing of pumps along with equipment on payment of License Fee Recovery (LFR) charges and the rate of tax of the above service. 7.2. At the outset it has to be examined whether the questions on which advance ruling is sought are admissible as per the provisions of the CGST Act 2017 governing advance ruling. 7.3. Section 95(a) of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1) shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 7.7. On a combined reading of the above provisions governing advance ruling under the CGST Act it is evident that an applicant can make an application for advance ruling if the following conditions are satisfied; (1) the applicant is either registered under GST law or is desirous of obtaining registration; (2) the matter or question pertains to any issue specified in Section 97 (2); (3) such a transaction is being undertaken or proposed to be undertaken by the applicant and the advance ruling is binding only on the applicant and the jurisdictional officer of the applicant. 7.8. The first question raised by the applicant is regarding the admissibility of input tax credit of the tax paid on the services of leasing of pumps and equipment received by them. The question is covered under clause (d) of sub-section (2) of Section 97 of the CGST Act, 2017 and is hence admitted. 7.9. The second question raised by them is regarding the rate of tax applicable on the service of leasing of pumps and equipment received by them. Though the question is on a matter covered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th to him unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other taxpaying documents as may be prescribed; (aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37; (b) he has received the goods or services or both. Explanation . - For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services - (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person. (ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. Sub-section (3) provides that the value of exempt supply shall be such as may be prescribed in cases covered by sub - section (2). Sub-section (4) of Section 17 provides for special provision for availment of ITC by banking companies. Sub-section (5) of Section 17 provides the negative list of goods and services in respect of which input tax credit is not available and sub-section (6) confers power on the Government to prescribe the manner in which the credit referred to in sub-sections (1) and (2) may be attributed. 7.14. Rule 42 and 43 of the Central Goods and Services Tax Rules, 2017 provides the manner of determination of input tax credit in respect of inputs and input services and in respect of capital goods respectively and its reversal thereof in cases where the provisions of sub -section (1) or sub-section (2) of Section 17 are attracted. These rules provide a formula restricting the input tax credit in respect of inputs, input services and capital goods which attract sub-section (1) and subsection (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies applies to the applicant. The service of leasing of pumps and equipment received by them are undoubtedly common input services that are used for taxable as well as the exempted supplies. Therefore, the applicant is not eligible for credit of the full amount of tax paid on the License Fee Recovery for the service of leasing of pumps and equipment received by them; but only eligible to avail the amount of input tax credit determined as per the provisions contained in Rule 42 of the CGST Rules, 2017. In the light of the observations as above, the following ruling is issued: RULING Question-1 : The admissibility of input tax credit of tax paid on inward supply of services by way of License Fee Recovery (LFR) on leasing of pumps along with the equipment. Answer : The inward supply of services by way of License Fee Recovery (LFR) on leasing of pumps along with the equipment being a common input service used by the applicant for the purpose of effecting taxable as well as exempted supplies the applicant is eligible only for proportionate credit as per the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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