Advance Ruling cannot be given on eligibility of utilization of ITC: AAR rejects Application [Read Order]

The Authority of Advance Rulings (AAR) at Karnataka has recently rejected the application of advance ruling filed by M/s Preethi Granite Exports on the ground that no ruling can be given on eligibility of utilization of Input Tax Credit (ITC).

The applicant, represented by B C bhat seeked an advance ruling on the following issues:

1. Can the Applicant utilize the balance available in Electronic Credit Ledger (Input Tax Credit) in respect of purchase of Raw material, consumables, capital goods relating to the manufacture of Granite Slabs to discharge GST liability of Rent for the premises given for Rental/ Lease basis?

2. Can the Applicant continue with the existing GSTIN to discharge the GST liability for Rent/ Lease received from Lessee and for filing the return relating to Renting / Leasing of the said premises?

3. Can Applicant utilize balance in Cash Ledger to discharge GST liability (Output Tax) of Rent for the premises given for Rental/ Lease basis?

On the admissibility of the application, the applicant initially claimed that the ruling sought in respect of questions at para 3 supra are covered under Section 97(2)(d) and Section 97(2)(e) of the Act ibid and hence the application is admissible.

However, the applicant in the additional submissions stated that the issue of utilization of Input Tax Credit is covered under Section 97(2)(b) and thus claimed that the instant application is admissible.

The authority bench of members Kiran Reddy T and M P Ravi Prasad reiterated the questions on which advance ruling can be given, in reference to Section 97(2)(f) as: –

1. Classification of any goods or services or both;
2. applicability of notification issued under the provisions of this Act;
3. determination of time and value of supply of goods or services or both;
4. admissibility of input tax credit of tax paid or deemed to have been paid;
5. determination of the liability to pay tax on any goods or services or both;
6. whether applicant is required to be registered;
7. 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.

Observing that, “the application is not maintainable as the questions on which advance ruling is sought by the applicant are not covered under the issues specified in Section 97(2) of the CGST Act 2017” the authority bench held that the instant application is liable for rejection in terms of Section 98(2) Of the CGST Act 2017.

To Read the full text of the Order CLICK HERE

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