Application for Advance Ruling Rejected Due to Non-Appearance and Non-Prosecution, Liberty to File Fresh One Granted
The AAR, West Bengal, rejected the application for advance ruling as the applicant failed to appear for the scheduled hearings and subsequently requested cancellation of the application for non-prosecution, with liberty to file a fresh one. Consequently, the application was not admitted due to non-compliance with procedural requirements.
ISSUES:
Whether input tax credit (ITC) against inward supply of inputs/input services used for construction of a warehouse can be claimed and utilized to pay tax on outward supply of renting services when such construction expenses are capitalized in books'Whether ITC against inward supply of inputs/input services used for construction of a warehouse can be claimed and utilized to pay tax on outward supply of renting services when such construction expenses are not capitalized in books?
RULINGS / HOLDINGS:
The questions raised regarding the admissibility of input tax credit on inward supplies used for construction of a warehouse, whether capitalized or not in the books of account, fall within the scope of clause (d) of sub-section (2) of section 97 of the GST Act concerning "admissibility of input tax credit of tax paid or deemed to have been paid".The application for advance ruling was not admitted due to non-appearance of the applicant or authorized representative at scheduled hearings and the applicant's subsequent request to cancel the application for non-prosecution; hence, the application was rejected with liberty to file a fresh application.
RATIONALE:
The legal framework applied includes the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017, collectively referred to as the GST Act, particularly sections 97 (advance ruling), 98 (procedure for advance ruling), 99 (Appellate Authority), and 100 (appeal against advance ruling).The questions on admissibility of input tax credit are expressly contemplated under section 97(2)(d) of the GST Act, which authorizes advance rulings on "admissibility of input tax credit of tax paid or deemed to have been paid".The authority emphasized procedural compliance, noting the absence of any pending or contemplated proceedings on the same questions and the necessity of personal hearing for admission of the application.The rejection of the application was based solely on procedural grounds-non-appearance and non-prosecution-rather than the merits of the ITC questions themselves, granting liberty to file afresh.
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