Advance Ruling Authority refrains from ruling after applicant withdrawal on input tax credit for hotel construction.

The Advance Ruling Authority refrained from issuing a ruling due to the applicant's withdrawal of the application. Consequently, no definitive decision was made regarding the admissibility of input tax credit for the construction of a hotel for providing taxable services, as sought by the applicant.

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Issues:
1. Admissibility of input tax credit of tax paid or deemed to have been paid.
2. Availability of Input Tax Credit on goods and services used in construction of a hotel for a company engaged in providing taxable services of hotel accommodation and related services.

Analysis:

Issue 1: Admissibility of input tax credit of tax paid or deemed to have been paid.
The applicant, a private limited company engaged in the hotel industry, sought an advance ruling regarding the admissibility of input tax credit under Section 97(2)(d) of the GST Act. The applicant, being a registered person, was eligible to seek an advance ruling as no proceedings were pending or passed by any authority. However, the applicant later withdrew the application, leading to no ruling being given on this issue.

Issue 2: Availability of Input Tax Credit on goods and services used in construction of a hotel.
The applicant planned to construct a hotel with various facilities and services, intending to commence commercial operations by a specific date. The construction involved procuring goods like cement, steel, plywood, and services of architects, engineers, designers, and labor contractors, all subject to GST. The applicant inquired about the availability of input tax credit on these goods and services used in construction for providing taxable services of hotel accommodation and related services. The jurisdictional officer opined that input tax credit for goods and services used in construction, where the output supply is taxable, would not be available under Section 17(5)(d) of the GST Act. However, due to the applicant's withdrawal of the application, no ruling was provided on this issue.

In conclusion, the Advance Ruling Authority refrained from issuing a ruling due to the applicant's withdrawal of the application. The withdrawal resulted in no definitive decision on the admissibility of input tax credit for the construction of a hotel for providing taxable services, as sought by the applicant.

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