The Karnataka Authority for Advance Rulings (AAR) has ruled that an advance ruling on Input Tax Credit (ITC) cannot be sought if proceedings are already pending under any provisions of the GST Act. This ruling aligns with the first proviso of Section 98(2) of the CGST Act 2017.
M/s V. Chitti Babu, a proprietary concern renting out marriage halls and convention halls to the public for conducting personal functions, including charitable and religious functions, had filed the application.
The applicant, represented by K.J Kamath, sought a ruling on ITC eligibility for taxes paid on construction materials used to build the marriage hall and on D.G sets, air conditioners, furniture, and chairs used in the business.
However, the authority noted that a Show Cause Notice regarding the same ITC claims had been issued to the applicant by the Deputy Commissioner of Commercial Taxes on September 5, 2023.
The bench, comprising M.P Ravi Prasad and Kiran Reddy. T, ruled that the application was not maintainable due to a pending Show Cause Notice (SCN) issued by the department for the same ITC claims. Section 98(2) of the CGST Act, 2017 disallows admitting applications where the raised questions are already under consideration in ongoing proceedings against the applicant under the Act.
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