Case Law Details
In re Bengal Rowing Club (GST AAAR West Bangal)
AAAR ruling on Rate of GST on Supply of food from restaurant, Other services provided in restaurant like booking of personal dining area, Supply of food at events organised in the club premises like get-togethers and parties hosted by members of the Club,Supply of other services being part of organising the get-togethers and parties in the club premises like valet parking charge, decoration charge, music charge, etc. and Other services provided by the club. AAAR further rules on The admissible proportion of input tax credit for services other than the supply of food.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, WEST BANGAL
1. This Appeal has been filed by The Bengal Rowing Club (hereinafter referred to as ”the Appellant”) on 29.04.2019 against Advance Ruling No. 48/WBAAR/2018-19 dated 28.03.2019, pronounced by the West Bengal Authority for Advance Ruling (hereinafter referred to as the WBAAR) in the matter of The Bengal Rowing Club.
2. The Bengal Rowing Club located at 13/2 Baroj Road, Rabindra Sarobar, Kolkata- 700 029, holding GSTIN 19AABCT1321M1ZC, stated to be a non-profit making company, is engaged in providing its members privileges and amenities such as swimming facility, gymnasium, indoor games, restaurant service, etc.
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Reaction (Sporadic)
On the first blush, the reported Ruling of the AAAR brings to surface many not-so-obvious points of grave doubt.
Briefly set out, in the order of relative importance and crucial import :
Extracts from the Ruling:
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8. The Appellant submitted order dated 14.09.2017 passed by Hon’le Calcutta High Court in WP No. 534 of 2006 in the matter of Bengal Rowing Club -vs- Commissioner of Service Tax, Kolkata where the Hon’ble Calcutta High Court held that the petitioner namely Bengal Rowing Club was a members’ club and the concept of mutuality applied with regards to transactions between a member and the Club and thus the petitioner was not liable to pay service tax under the Finance Act, 1994 as amended by the Finance Act, 2005.
UQ
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“10. The matter is examined and written and oral submissions made before us are considered. As the ruling of the WBAAR is restricted to the question of rate of tax on food supplied at social gatherings, the discussion in this forum is also restricted to this issue only. The issue of applicability of taxation on a members’ club under the GST Act is not taken up for discussion.”
Ruling :
“Accordingly, the Advance Ruling No. 48/WBAAR/2018-19 dated 28.03.2019 is modified to this effect and the Appeal stands disposed of as above.”
II. Leading case law: SC Judgment in CIT vs Venkatesh Premises (full text @
https://indiankanoon.org/doc/97274203/.)
III Personal Thoughts / viewpoints:
1. Before the AAR the one and only Issue raised for its Ruling was on the ‘RATE’ to apply. However, brfore the AAAR , also the Issue involving a substantial question of law was raised, for the first time.
The appellate authority has impliedly refused to give its Ruling thereon, with the concluding observation, that reads:
“Accordingly, the Advance Ruling No. 48/WBAAR/2018-19 dated 28.03.2019 is modified to this effect and the Appeal stands disposed of as above.”
POSER: Has the AAAR erred in doing so ?
2. Applicant club was represented by a FCA , but before the AAAR present for the applicant was an ADVOCATE
Be that as it may, attention of the AAAR is not seen to have been drawn and / or argued with special focus / relying on the line of favourable court decisions – including that of the SC- for instance in the case of – CIT vs Venkatesh Premises (supra)
POSER: In view of, and having due regard to ithe
circumsances as narrated above , –
Is there not good scope for a reapproach to the AAAR, pressing for a review and a fresh Rulng ?
For doing so, of course, reliance might have to be placed on –
( a) case law on the overriding “COMMON LAW’
princiles of equity, ‘natural justice’ and ‘good conscience’.;
and
(b) the objet and purpose intended to be served, as avowed, and spelt out, through the scheme of statutory provsions governing ‘ADVANCE RULING’- enacted on principally /followng the same lines under the income-tax regime.
Over to field experts- Any useful but eminent/well-founded thoughts to spare and share !
courtesy