AAR rejects GST exemption ruling application for affordable housing construction services due to retrospective nature

AAR Rajasthan rejected an advance ruling application concerning GST exemption for construction services under affordable housing scheme. The applicant sought ruling on supplies made from 01.04.2019 to 31.03.2021, but filed application on 06.07.2021. AAR held that advance ruling scope is limited to transactions being undertaken or proposed to be undertaken, not past completed transactions. The application was deemed not maintainable and rejected under GST Act, 2017 provisions.

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Issues Involved:
1. Eligibility of GST exemption for services provided by the applicant under Notification No. 12/2017-Central Tax (Rate), dated 28-06-2017.

Issue-wise Detailed Analysis:

1. Eligibility of GST Exemption:

Applicant's Submission and Interpretation:
- The applicant, a registered entity under GST, is engaged in the supply of services for the construction of residential houses under the affordable housing scheme, specifically the Chief Minister's Awas Yojana-2015, which aligns with the Pradhan Mantri Awas Yojana.
- The applicant has an agreement with a builder for pure labor services involving various construction activities without the inclusion of materials.
- The applicant contends that their services fall under the exemption entry at Sl. No. 10 of Notification No. 12/2017-Central Tax (Rate), which exempts pure labor contracts for construction under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana from GST.
- The applicant references a similar case (M/s. Sevk Ram Sahu) where the ruling favored the exemption for pure labor services under the same notification.

Personal Hearing:
- The applicant reiterated their written submissions and requested an early disposal of the application.

Findings, Analysis & Conclusion:
- The agreement between the applicant and the builder was effective from 01.04.2019, with the contract duration specified from 01.04.2019 to 31.03.2021.
- The applicant sought an advance ruling on 06.07.2021 concerning the applicability of the exemption notification for services provided during the contract period.
- As per Section 95(a) of the CGST Act, 2017, an advance ruling pertains to supplies being undertaken or proposed to be undertaken by the applicant.
- The authority noted that the applicant's request for a ruling on transactions already completed (01.04.2019 to 31.03.2021) falls outside the scope of an advance ruling, which is intended for future or ongoing transactions.

Ruling:
- The application for an advance ruling is not maintainable as it pertains to past transactions. Consequently, the application is rejected under the provisions of the GST Act, 2017.

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