TaxTMI 
TaxTMI 
2026 (6) TMI 939
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act shall be binding only:- (a) on the Appellant who had sought it in respect or any matter referred to in sub-section (2) of Section 97 for advance ruling: (b) on the concerned officer or the jurisdictional officer in respect of the Appellant. 3. In terms of Section 103(2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said Advance Ruling have changed. 4. In terms of Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the Appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made there-under shall apply to the Appellant as if such advance ruling has never been made. Order under Section 101 of Central Goods and Services Tax Act, 2017/ Haryana Goods and Services Tax Act, 2017 The present appeal has been filed by M/s RHI Magnesita India Limited, 19th and 20th Floor, DLF Square, M Block Jacaranda Marg, DLF City Phase 2, Gurugram, Gurugram, Harya....
X X X X Extracts X X X X
X X X X Extracts X X X X
....€¢ Identifying and procuring investors for the securities; • Guiding on the appointment of legal counsel, other professional advisors, and intermediaries; • Coordinating the preparation of corporate and marketing documentation; • Organizing meetings with institutional investors. • Assisting with listing applications for the securities on stock exchanges; • Supporting applications for regulatory approvals, clarifications, or exemptions from SEBI and other authorities; • Furnishing required reports, certificates, and information-to-SEBI-and regulatory bodies; and • Handling closure of the placement and customary post-placement activities. 1.6 In consideration for these services, HSBC was entitled to a fee computed as an aggregate percentage of the equity funds raised through the QIP. Additionally, the Appellant was obligated to reimburse all out-of-pocket expenses incurred by HSBC, irrespective of whether the fund raise was successful. 1.7 Besides the services from HSBC, the Appellant also procured ancillary services such as legal services, consultancy, and other professional inputs di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....acement Institutional from HSBC Securities and Capital Markets (India) Pvt. Limited. 3. ORDER PASSED BY THE ADVANCE RULING AUTHORITY ON ABOVE QUESTIONS WAS AS UNDER: No, the applicant is not eligible to claim input tax credit on the services availed in connection with the Qualified Institutional Placement, as stated in the application. 4. PRAYER OF THE APPLELLANT: The Appellant prayed to: a) Set aside the Advance Ruling No. HR/HAAR/30/2023-24 dated February 21, 2024, passed by the Ld. Authority for Advance Ruling. Haryana and allow the appeal in full. b) hold, adjudge and declare that the Appellant is entitled to avail Input Tax Credit on services used in relation to raise-funds through QIP. c) grant a personal hearing. d) permit the Appellant to file further / additional submissions in these proceedings; and e) pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case. 5. GROUNDS OF APPEAL IN BRIEF: 1. The Impugned Order is vague, non-speaking, and lacks reasoned findings: The Authority for Advance Ruling has failed to pass a speaking order by not providing any detail....
X X X X Extracts X X X X
X X X X Extracts X X X X
....igned with the appellant's MoA/AoA. The restrictive interpretation adopted by the Authority is untenable. Reliance is placed on Coca Cola India Pvt. Ltd. v. CCE [2009 (15) S.T.R. 657 (Bom.)] and Cinemax India Ltd. v. UOI [2011 (24) STR 3 (Guj.)] for the broad meaning of "furtherance". 4. Support from pre-GST judicial precedents allowing credit on fund-raising activities: Analogous issues under the Cenvat regime were decided in favour of assesses, allowing credit on services for raising funds via disinvestment, preferential shares, private placement, and IPO-related activities as relating to business. Key rulings include Hinduja Global Solutions Ltd. [2016 (42) S.T.R. 932 (Tri.-Bang), affirmed 2022 (61) G.S.T.L. 417 (Kar.)], Ahmednagar Forgings v. CCE [2017 (6) G.S.T.L. 54 (Tri.-Mum.)], Krenex Microsystems v. CCE [2016 (42) S.T.R. 533 (Tri.-Bang.)], and Steel Strip Wheels. v. CCE [2016 (42) S.T.R. 72 (Tri.-Del.)]. These were placed before the Authority but ignored, warranting reversal. In light of the foregoing, the appellant prays that the impugned order be set aside and it be held that raising funds through QIP qualifies as "business" / in the course or furtherance of busine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant, include: • Optimization of manufacturing operations, reduction in import-related costs, expansion of product portfolio, and enhancement of market share in domestic and export markets; • Strengthening local manufacturing capabilities to meet growing demand from existing and new customers more efficiently; • Achievement of operational excellence, productivity improvements, and performance enhancement across existing and newly acquired facilities; • Addition of approximately 300,000 tons of annual capacity in shaped and unshaped refractories to the appellant's production footprint in India. 5.7 In light of the above, the appellant reiterates that the investment in DOCL constitutes an activity in the course or furtherance of its business, aimed at expansion, operational synergy, and overall business-advancement. Consequently, the services availed in relation to the QIP process, which facilitated the raising of funds deployed inter alia for the said investment, are eligible for input tax credit under the provisions of the CGST/HGST Acts. The detailed arguments on this aspect, including statutory interpretation and precedent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 We have carefully examined the appeal memorandum, the impugned order dated 21.02.2024 passed by the Haryana Authority for Advance Ruling (HAAR), the written and oral submissions made by the appellant during the course of personal hearing and the additional written submissions filed pursuant to directions issued during the hearing. The additional submissions include details relating to the subsidiary relationship with Dalmia OCL Limited (DOCL), the acquisition through the Share Swap Agreement dated 05.01.2023, and the strategic rationale for investment in DOCL, including capacity expansion, operational synergies, market expansion and cost optimisation within the refractories segment. 7.2 The principal issue for consideration is whether the services availed by the appellant in relation to the raising of funds through Qualified Institutional Placement (QIP) qualify for Input Tax Credit (ITC) under Section 16(1) of the CGST Act, 2017. Section 16(1) entitles a registered person to take credit of input tax charged on goods or services used or intended to be used in the course or furtherance of business, subject to the conditions prescribed under the Act. 7.3 The appellant has con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her or not there is volume. frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) '[activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and] (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; 7.5.2 Section 2(52) "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stered person;] [(ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;] (c) subject to the provisions of [section [ ***]], the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39; Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be [paid by him along with interest payable under section 50], in such manner as may be prescribed: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of such invoice or debit note for supply of goods or services or both, in a return under section 39,- (i) filed up to thirtieth day of November following the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier; or (ii) for the period from the date of cancellation of registration or the effective date of cancellation of registration, as the case may be, till the date of order of revocation of cancellation of registration, where such return is filed within thirty days from the date of order of revocation of cancellation of registration, whichever is later.] 7.5.5 Section 17. Apportionment of credit and blocked credits.- (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Serv....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... business within the meaning of Section 16(1) of the CGST Act. The appellant has relied upon certain decisions during personal hearing. It is found that following decisions of the erstwhile Service Tax era, on the issue of Cenvat Credit on service tax paid on financial services are relevant to discuss in the order:- 1. Steel Strips Wheels Ltd. v. Commissioner of C. Ex., Chandigarh titled as 2016 (42) S.T.R. 72 (Tri.- Del) [17-06-2015] It has been decided that financial services rendered for raising capitals are eligible input services. Relevant para 5 of the order is reproduced as under; "that the contention of the revenue that such financial services rendered to the appellant for the purpose of raising capital is not related to manufacture directly or indirectly cannot be accepted. The definition of "input service" is not restricted being limited to services which are directly linked to the manufacturing activity. But the definition has a wide ambit and covers services which are relating to business activities of manufacture. In Aditya Birla Nuvo Ltd. v. CCE (supra) it was held that merger charges are covered in the category of services of financing and Cenvat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der the erstwhile Cenvat regime-that expenses incurred for raising finance for business operations bear a nexus with business activities -- continues to be relevant under the GST framework, particularly in view of the broad language employed in Section 16(1) of the CGST Act. Further, as per definition of "Business" as provided under Section 2(17) of CGST Act, the scope is quiet wide. The payment on QIP related services is well covered in the definition. It can be safely concluded that the finances raised through QIP by the appellant would definitely come under clause (b) of Section 2(17) as a transaction incidental or ancillary to the main business as the repayment of loans is essential to run the business activity. Accordingly, we hold that ITC on the proportionate services attributable to the portion of QIP proceeds utilised for the appellant only is admissible under Section 16(1) of the CGST Act. 7.6.2 Investment in Wholly Owned Subsidiary (DOCL) The second component of utilisation relates to the investment of funds in the equity shares of DOCL, the appellant's wholly owned subsidiary. The appellant has submitted that the investment in DOCL was undertaken with the ob....