Marriage Hall Rental Business Advance Ruling Denied Due to Undisclosed Pending Tax Credit Proceedings Under Section 98(2)

AAR rejected the advance ruling application for a marriage hall rental business. The Authority found the application non-maintainable due to a pre-existing show cause notice regarding input tax credit, which the Applicant had failed to disclose. Citing CGST Act Section 98(2), the ruling determined the application could not proceed while related proceedings were pending.

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Issues:
- Admissibility of input tax credit on construction materials for a marriage/convention hall.
- Admissibility of input tax credit on inward supplies for letting out marriage/convention halls.
- Maintainability of the advance ruling application.

Analysis:
The Applicant, engaged in renting out a marriage/convention hall, sought an advance ruling on the admissibility of input tax credit on construction materials and inward supplies. The Applicant appeared for personal hearing proceedings but failed to attend subsequent hearings despite multiple opportunities. The Authority noted the similarity between provisions of the CGST Act and KGST Act unless specifically mentioned otherwise. The Authority considered the Applicant's submissions and sought to determine the maintainability of the application.

Upon review, it was found that a show cause notice had been issued to the Applicant for recovery of ineligible credit before the advance ruling application was filed. The Applicant had provided incorrect information in the application, stating that the questions raised were not pending in any proceedings, thereby suppressing the show cause notice. Citing Section 98(2) of the CGST Act 2017, the Authority concluded that the application could not be admitted as the questions raised were already pending in the show cause notice proceedings under the Act.

Consequently, the Authority rejected the Applicant's advance ruling application based on the first proviso of Section 98(2) of the CGST Act 2017. The decision was made due to the pending nature of the questions raised in the application in the show cause notice proceedings, rendering the application non-maintainable.

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