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TMI Blog2024 (7) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as an Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. 1. At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matter and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017. 2. The applicant submitted a copy of challan dated 10-11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any day in normal. Provided that the employer after obtaining written consent of the women employees shall allow them to work between 8.00 pm and 6.00 am, subject to providing adequate protection of their dignity, honour and safety. Para 7 of the Notification Transport arrangements shall be provided to the women employee who works in shifts. A notice to this effect shall be exhibited at the main entrance of the establishment indicating the availability of transport" 3.6. The applicant submitted that in compliance with the said mandate, the Applicant procures services of leasing/renting/hiring of motor vehicles for passenger transportation and provides the same to its women employees working in shifts. 3.7. The Applicant further submitted that they have an internal policy wherein it is mandatory (subject to exceptional situations) for woman employees log in from 9:00 PM till 6:00 AM or leaving after 8:00 PM till 6:00 AM to use only the cab facility provided by the Applicant for commuting to/fro, workplace and home. That however, the cab facility is provided by the applicant to women employees workings in all shifts irrespective of login/logout timing. 3.8 The applicant submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n force." That the Applicant had adopted a position to not avail ITC for tax paid on services of leasing/hiring/renting of motor vehicles for transportation of employees till March 2022 out of abundant caution. That they have started availing Input tax credit from April 2022 onwards and thus have preferred this ruling for a clarity on the eligibility of ITC in respect of GST paid on above-mentioned input services availed by them. 3.11. With regard to the interpretation of law in respect of the questions the applicant quoting Article 368 (12A) of the Constitution which defines 'goods and services tax', Section 16, Section 17 of the CGST Act, 2017 and the substitution of provisions made in Section 17 vide CGST(Amendment) Act, 2018 the applicant submitted that prior to the amendment, ITC on Rent A Cab, Life Insurance, Health Insurance was blocked except when it is obligatory for an employer to provide the said services to employees under any law for the time being in force or when it is used for rendering outward taxable supply of same category of goods or services. The applicant submitted that after the said amendment, the term "Rent A Cab" was removed from Section 17 of CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insertion of proviso to Section 17 (5) (b) of CGST, 2017 was to Widen the scope of input tax credit and make ITC available on those goods or services that are obligatory for an employer to provide to its employees under any law for the time being in force. That hence, Input Tax Credit can be availed as long as the conditions prescribed in Section 16 of CGST Act. 2017 are satisfied and the supply is not categorized as blocked credit under Section 17 of CGST Act, 2017. 3.16. The applicant submitted that in the instant case, it is evident that the services of leasing or renting or hiring of passenger transportation vehicles is used in the course and furtherance of Applicant's business. That it is beyond a stretch of doubt that transportation of employees to the place of business is vital for conducting the business activities. The applicant submitted that they are obligated and mandated under the Tamil Nadu Shops and Establishment Act, 1947 to provide safe transportation facilities to women employees in all shifts. That fulfilment of a statutory compliance i.e. compliance with the provisions of Tamil Nadu Shops and Establishments Act 1947, bestowed upon them is critical to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en employees as per statutory requirement, would be eligible to be availed as Input tax credit. 3.20. The applicant once again reiterated that ITC was not availed on leasing/renting/hiring of motor vehicles for transportation of women employees prior to the introduction of proviso to Section 17 (5) (b) of CGST Act, 2017 for reasons stated above. That consequently, they believe that ITC should be permitted to be availed for the period prior to F.Y 2022-23 even though the time limit for availing ITC may have elapsed as the Applicant would be at a substantial loss because GST paid on aforementioned services is a sizable amount. 3.21. The applicant further submitted that the issuance of separate clarification through Circular No. 172/04/2022-GST makes it clear that ITC on goods and services procured for satisfaction of statutory obligation by an employer would be eligible from the time or introduction of said proviso and substantial benefit granted by the Act cannot be denied on procedural grounds. That ITC is a form of concession and benefit granted by the legislature to a taxpayer and Section 16 of CST Act, 2017 makes it clear that except the category of supplies notified in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment-RANE TRW STEERING SYSTEM LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE AND CENTRAL TAX, CHENNAI OUTER COMMISSIONERATE (2018(2) TMI 1745 - Madras High Court) 9. Annexure-I-Copy of advance ruling-Gujarat for M/s. Troika Pharmaceuticals Limited (2022 (9) TMI 200 Authority For Advance Ruling, Gujarat) 10. Annexure J-Copy of advance Ruling-M/s. Access Healthcare Services Private Limited (2023 (8) TMI 1205-Authority for Advance Ruling, Tamil Nadu) and Copy of Judgment-Auriay Chamber of Commerce (1986 (25) E.L.T 867-SUPREME COURT). 4.1 The applicant is under the administrative control of State Tax Authorities. The concerned authorities of the Center and State were addressed to report if there are any pending proceedings against the applicant on the issue raised by the applicant in the ARA application and for comments on the issues raised. 4.2 The concerned Central authority vide letter GEXCOM/TECH/MISC/4913/ 2023-TECH dated 24-05-2024, stated that there are no pending proceedings against the applicant on the issues raised in the application and offered the following comments;- * With regard to query no. 1 the Central authority quoted the provisions of sub-clause (iii) of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r decided on the issue raised in the application by the Applicant. 5.0 PERSONAL HEARING The applicant, was given an opportunity to be heard on 28.05.2024. Ms. Shrayashree T, Advocate, appeared for the personal hearing as the Authorised Representative (AR) of the Applicant. The AR explained in brief about the business of the applicant and reiterated the submissions made in their application. The members enquired as to whether records are maintained differentiating the services of leasing / renting/ hiring of motor vehicles used exclusively for men and women employees/ staff. The AR stated that they will be submitting the required details at the earliest. The members enquired if there is anything more to add to the submissions made in the application to which the AR replied that there is nothing more to add. DISCUSSION AND FINDINGS 6.1 We have carefully considered the submissions made by the applicant in the advance ruling application, the submissions made during the personal hearing and also the submissions made vide their letter 21.06.2024. 6.2 The Applicant is before us seeking Advance ruling on the following questions;- 1. In the facts and circumstances of the case, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g/ hiring of motor vehicles used exclusively for men and women employees/ staff, the applicant vide their letter dated 21.06.2024 submitted that the company has an internal MIS generated by the system, which provides all the details of the travel such as date & time of travel, name gender of the employee travelling, shift of travel, among other details basis which the vendor generates the invoice. Hence the applicant is before this Authority with queries, listed in para 6.2 above, as to whether the Input tax credit on the above said services received by them is eligible and the date of such eligibility. 6.5. With regard to the first query of the applicant i.e. In the facts and circumstances of the case, whether tax paid oji input Services in respect of leasing/ renting/ hiring of motor vehicles to provide transportation facility to ensure safety and security of women employees as per Tamil Nadu Shops and Establishments Act, 1947 is eligible to be availed as input tax credit (ITC)?, we find that to answer the same we need to dwell into the provisions of Section 16 and Section 17 of the CGST Act, 2017. Whereas section 16 of the CGST Act, 2017 provides for the eligibility and conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder any law for the time being in force. 6.7. Further it is seen that CBIC vide circular No. 172/04/2022 dated 06.07.2022, issued by the Ministry of Finance wherein it was clarified that the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the whole of clause (b) of sub-section (5) of section 17 of the CGST Act. The extract of the said circular is reproduced below; SI.No. Issue Clarification 1. Whether the proviso at the end of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? 1. Vide the Central Goods and Service Tax (Amendment Act) 2018, clause (b) of sub-section (5) of section 17 of the CGST Act was substituted with effect from 01.02.2019. After the said substitution, the proviso after subclause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act provides as under: "Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided under Section 16 of the CGST Act, 2017. 6.10. With respect to the second query of the applicant i.e If eligible, can entire ITC be availed by the, applicant for providing the transport facility in all shifts considering the safety of women as mandated under the Tamil Nadu Shops and Establishment Act, 1947?, we find that, and as already discussed in para 6.6 above, the Input tax credit on services of leasing, renting or hiring of motor vehicles shall not be available as the same falls under the category of blocked credit and the same becomes eligible for availment as per the proviso to the said sub-section which provides that the input tax credit in respect of such goods or services or both shall be available, where' it is obligatory for an employer to provide the same to its employees under any law for the time being in force. Hence, in the instant case the Input tax credit shall be available to the applicant, only on the tax paid on services of leasing, renting or hiring of motor vehicles for providing transport facilities to women employees alone who are arriving or leaving workplace between 8.00 P.M to 6.00 A.M. as the same has been made obligatory vide the Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 17 of CGST Act, 2017, ITC would be eligible on tax paid on all goods or services or both received by a registered person in the course or furtherance of business. * that prior to issuance of Circular 172/04/2022-GST there was genuine doubt and ambiguity surrounding clause b of Section 17 (5) of CGST Act, 2017. * that the time limit prescribed in Section 16 of CGST Act, 2017 is with respect to the availment of ITC and not the eligibility of ITC itself. That in the instant case, until issuance of Circular 172/04/2022-GST more clarity was awaited on the eligibility of ITC and the ambiguity has been removed altogether only after issuance of the said circular and hence the benefit of ITC cannot be denied on procedural grounds without any fault on the part of the Applicant. * the applicant placed reliance on judgement pronounced by Supreme Court in the case of Auriay Chamber of Commerce (1986 (25) E.L.T 867-SUPREME COURT) wherein it was held that rules of procedure are hand maids of Justice and not its mistress. It the dealer is not guilty of latches and there is no actual prohibition for refund, one should not get entangled in the cobweb of procedure but do substantial justice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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