TaxTMI 
TaxTMI 
2026 (10) TMI 69
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....ct and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act'2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act' 2017. 4. BRIEF FACTS OF THE CASE: 4.1 The applicant is a Public Limited Company registered under the Companies Act, 1956 and is also registered under the provisions of the Central Goods and Services Tax Act 2017 read with the provisions of the Telangana State Goods and Services Tax Act 2017. 4.2 That the applicant is one of the most prominent clothing merchants in South India offering both affordable fashion and ethnic clothing. The applicant manages four well-known and reputable brands: Kalamandir, Kancheepuram Varamahalakshmi Silks, Brand Mandir, and KLM Fashion Mal....
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....blic offer (IPO) is defined as follows: '(w) "initial public offer" means an offer of specified securities by an unlisted issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in an unlisted issuer" Thus, issue of IPO can be categorized into below mentioned scenarios: a. Fresh issue of shares-In fresh issue, a company issues new shares that are offered to the public for the first time. The proceeds from the sale of these shares go directly to the company, and they are typically used for expansion, debt reduction, or other corporate purposes. b. Offer for sale (OFS)-In OFS, existing shareholders, such as promoters, venture capitalists, or other investors, sell their shares to the public. The company does not receive any proceeds from this type of offering; instead, the selling shareholders benefit from the sale. c. Combined Offer-This type of issue combines both a fresh issue of shares and an offer for sale. Here, the company issues new shares to raise capital, and existing shareholders also sell some of their shares. 7.2 The instant cas....
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....nses incurred. 7.5 At the outset, it is made clear that the expenses incurred relatable to "offer for sale " by the existing share holders cannot be deemed to be part of the business of the company Therefore, though it may be facilitated by the company, the GST levied on such expenses by the suppliers of service is not eligible for ITC claim by the company. 7.6 Statutory provisions: Section 2(17)(b) of the CGST Act, 2017: "business includes - (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub- clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether 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 m....
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..... • In furtherance of business - the transaction, though it may not itself constitute the principal business activity, is undertaken to promote, facilitate, support or advance the business. 7.8. Furtherance of business The expression "furtherance of business" is not specifically defined in the CGST Act. In ordinary legal/commercial understanding, it means an activity undertaken with the object or effect of promoting, advancing, facilitating or supporting the business of the taxable person. It has a wider meaning than merely undertaking the core business activity. A common misconception is that an inward or outward transaction must be directly related to the actual goods or services sold by the taxpayer to qualify as being in furtherance of business. That is not necessarily correct. 7.9 The distinction between "In the course of" and "in furtherance of" can be explained as follows: i. In the course of business Activities forming part of, or occurring during, the normal conduct of business. ii. In furtherance of business Activities that support, facilitate, promote or advance the business, even though they may not form part of the principal business a....