2021 (3) TMI 577 - AAR - GST

Club's GST Ruling Application Rejected for Non-Payment of Fee

The club's application for an advance ruling on GST liability of membership fees and other related issues was rejected by the Authority for Advance Ruling ... Application in FORM GST-ARA-01 accompanied by prescribed fee - requirement to deposit separate fees under CGST and GGST Rules - non-maintainability under Section 98(2) of the CGST Act, 2017Application in FORM GST-ARA-01 accompanied by prescribed fee - requirement to deposit separate fees under CGST and GGST Rules - non-maintainability under Section 98(2) of the CGST Act, 2017 - Whether the Advance Ruling application is maintainable where the applicant paid only one of the two prescribed fees required under the CGST and GGST Rules. - HELD THAT: - The Authority examined the statutory scheme under Section 97 read with Rule 104 of the CGST Rules and the corresponding provisions of the GGST Act and Rules. Rule 104 requires an application in FORM GST-ARA-01 to be accompanied by a fee of five thousand rupees under the CGST Rules; an identical requirement exists under the GGST Rules. A combined reading of the provisions obliges payment of both fees (i.e., five thousand rupees under each statute), resulting in a total fee of ten thousand rupees for filing before the State Advance Ruling Authority. The applicant filed FORM GST-ARA-01 but deposited only five thousand rupees. For non-compliance with the mandatory fee requirement, the application is invalid under the statutory scheme and, consequently, liable to be rejected. Given this defect in maintainability, the Authority declined to consider the merits of the substantive questions raised. [Paras 13, 14, 15, 16, 17]Application rejected as non-maintainable under Section 98(2) for failure to deposit the total prescribed fee of ten thousand rupees.Final Conclusion: Advance Ruling application dismissed as non-maintainable for non-payment of the requisite fees (only one of the two statutory fees was paid); substantive questions were not adjudicated. Issues:1. Liability of GST on membership subscription and admission fees2. Applicability of GST on transactions between the club and its members3. SAC code and services description for taxable activities4. Input Tax Credit eligibility for catering services5. Exemption eligibility for the clubAnalysis:1. The applicant, a registered Association of Persons, sought an advance ruling on the GST liability of membership subscription and admission fees collected from members. The club argued that these fees were for covering day-to-day expenses and not for providing additional goods or services. They contended that no GST should be charged on these fees.2. The club also raised the issue of the applicability of GST on transactions between the club and its members based on the principle of mutuality. Citing the case of State v/s. Calcutta Club Ltd., they argued that no GST should be levied on transactions between a members club and its members.3. The club inquired about the relevant SAC code and services description for taxable activities if GST was applicable to their transactions. They sought clarity on the specific classification for their services under the GST regime.4. Additionally, the club questioned the eligibility to claim Input Tax Credit on the tax paid for catering services used for holding member meetings and events. They sought clarification on the extent of input tax credit they could claim.5. Finally, the club sought clarification on their eligibility for exemption from GST if their activities were deemed non-taxable. They inquired about the criteria for exemption under the GST laws.The Authority for Advance Ruling noted that the applicant failed to pay the total prescribed fee of Rs. 10,000 as required by the relevant provisions of the CGST Act, 2017 and the GGST Act, 2017. As per Section 98(2) of the CGST Act, 2017, the application was liable for rejection due to non-compliance with the fee payment requirement.In conclusion, the application by the club for an advance ruling was rejected under Section 98(2) of the CGST/GGST Act, 2017 for being non-maintainable. The ruling was based on the club's failure to fulfill the statutory fee payment obligations, rendering their application invalid for an advance ruling.