AAAR dismisses GST exemption appeal for completed labour services under housing scheme citing timing requirements

The AAAR dismissed an appeal regarding GST exemption for labour services under Chief Minister's Awas Yojana. The appellant sought advance ruling on exemption applicability under Notification No. 12/2017-CT(R) for construction services. However, the service contract commenced on 01.04.2019 and expired on 31.03.2021, while the advance ruling application was filed much later. The AAAR held that advance ruling applications must relate to services "being undertaken or proposed to be undertaken," not services already completed for over two years under an expired agreement. The appeal was dismissed as non-maintainable.

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Issues Involved:
1. Whether the services provided by the appellant fall under the exemption entry at SI. No 10 of Notification No. 12/2017-Central Tax (Rate), dated 28-06-2017, and are eligible for exemption from payment of GST.
2. Whether the application for advance ruling was maintainable given the timing of the services provided.
3. Interpretation of the term "being undertaken" in the context of Section 95 of the CGST Act, 2017.

Issue-wise Detailed Analysis:

1. Exemption Eligibility under Notification No. 12/2017-Central Tax (Rate):
The appellant, engaged in the supply of pure labor services for the construction of residential houses under the Affordable Housing Scheme, sought clarification on whether these services are exempt from GST under SI. No. 10 of Notification No. 12/2017-CT(R), dated 28-06-2017. The appellant argued that their services should be exempt as they fall within the scope of pure labor contracts for the construction of new residential houses under government schemes aimed at affordable housing.

2. Maintainability of the Application for Advance Ruling:
The Rajasthan Authority for Advance Ruling (AAR) rejected the application on the grounds that it pertained to services already undertaken prior to the filing date, thus falling outside the purview of advance ruling as defined under Section 95 of the CGST Act, 2017. The appellant contended that the services were ongoing and thus should be considered as "being undertaken," making the application maintainable. The AAR, however, held that since the services were provided between 01.04.2019 and 31.03.2021, the application filed on 06.07.2021 was not maintainable.

3. Interpretation of "Being Undertaken" in Section 95 of the CGST Act, 2017:
The appellate authority examined the definition of "advance ruling" under Section 95(a) of the CGST Act, 2017, which includes decisions on matters related to the supply of goods or services "being undertaken" or "proposed to be undertaken." The authority concluded that "being undertaken" refers to ongoing activities and does not cover services already completed. The authority noted that the appellant's contract, effective from 01.04.2019 to 31.03.2021, had expired before the application was filed. Despite the appellant's claim of an extension due to the pandemic, the authority found that the extension documents were not part of the original application and were not submitted until after the application date.

Conclusion:
The appellate authority upheld the AAR's decision, stating that the application for advance ruling was not maintainable as it related to services already completed before the filing date. The authority emphasized that the purpose of advance ruling is to provide clarity on tax liability for future or ongoing activities, not for activities already concluded. Consequently, the appeal was rejected, and no advance ruling was given on the merits of the exemption claim.

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