AAR rejects advance ruling application under Section 98(2) as identical GST issues already decided in audit proceedings

AAR Karnataka rejected an advance ruling application as inadmissible under Section 98(2) of CGST Act 2017. The applicant sought clarification on GST implications for employee food, beverages, and transportation services, including ITC eligibility and supply classification. The Authority determined that identical issues had already been decided in audit proceedings against the same applicant under CGST Act provisions. Since the questions were previously adjudicated in the applicant's case, the first proviso to Section 98(2) applied, making the application inadmissible.

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Issues:
1. Applicability of GST on food and beverage facilities provided by the applicant.
2. Eligibility for Input Tax Credit on various supplies.
3. Classification of food and beverage provision as a taxable supply.
4. Applicability of GST on transportation services for employees.
5. Consideration of the net cost as part of the principal business.

Analysis:
The applicant, engaged in pharmaceutical manufacturing, sought an advance ruling on several issues related to GST applicability on their business operations. They inquired about Input Tax Credit availability on inward supplies for food and beverages, capital equipment, and services from external caterers. Additionally, they questioned the treatment of food provision to employees during working hours as a taxable supply and the GST implications on amounts collected from employees. The applicant also sought clarity on GST applicability on transportation services provided to employees and Input Tax Credit eligibility for such services.

During the personal hearing, it was revealed that the issues raised in the application were already under audit by the Central Tax Audit-I Commissionerate, Bengaluru, for the period 01.07.2017 to 31.03.2020. The audit team had addressed the same concerns, and the applicant had agreed to the audit findings, paying the applicable GST, interest, and penalties. The Authority noted that the questions raised in the application were already decided in the audit proceedings, making the application inadmissible under the first proviso to Section 98(2) of the CGST Act 2017.

Considering the above, the Authority rejected the application as "inadmissible" based on the first proviso to Section 98(2) of the CGST Act 2017. The issues raised by the applicant had already been addressed and decided during the audit proceedings, rendering the advance ruling application redundant.

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