ITC on Hotel Construction- AAR allows withdraw of application

In re Geetastar Resorts Pvt. Ltd. (GST AAR Rajasthan)

Whether Input Tax Credit on goods and services used in construction of hotel will be available to the applicant engaged in providing taxable services of hotel accomodation and related services?

Since the applicant has withdrawn the application, therefore, no ruling is given.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, RAJASTHAN

Note: Under Section 100 of the CGST/ RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/ RGST Act, 2017. within a period of 30 days from the date of service of this order.

• At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
• The issue raised by M/s Geetastar Resorts Pvt. Ltd., 601, Geeta Enclave, Vinobha Marg, C-Scheme, Jaipur, Rajasthan 302001 (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (d) given as under: –

d. Admissibility of input tax credit of tax paid or deemed to have been paid.

• Further, the applicant being a registered person (GSTIN is 08AAECG4811G1ZT as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling.

1. SUBMISSION AND INTERPRETATION OF THE APPLICANT:

• The applicant is a private limited company engaged in hotel The applicant is registered with the GST department in Rajasthan having GSTIN OSAAECG4811G1ZT.
• The applicant has started construction of a hotel on its land situated atAraji No. 516/212 Rakba 3 Bigha, 549/212 Rakba 6 Bigha 10 Biswa, Araji No. 558/212 14 Biswa, Village- Seed KI Bhagal, Gram Panchayat- Gvaar, Kadiyan Road, Teh.- Kurnbhalgarh Distt.- Rajsamand (Raj), total measuring 10 Bigha 4 Biswa.
• The applicant proposes to build 68 Rooms, one Restaurant having seating capacity of 50 persons, a Bar, Conference hall with seating capacity of 75 persons and Banquet Hall having seating capacity of 100 persons.
• The company has planned to commence the commercial operations of hotel by 31^st Dec 2020.
• That the applicant will procure various goods like cement, steel, plywood, paint etc. and various kind of services including professional services of architects, engineers, designers, labour contractors etc. for the construction of the hotel. The applicant will have to pay GST on the procurement of such goods and services from suppliers registered under GST.
• That with effect from the commencement of operations of the hotel, the hotel will be providing services including hotel accommodation, restaurant service, renting of hotel spaces including conference halls/ outdoor area for events etc. which are all taxable supplies under GST and hence the applicant will have to pay GST at applicable rates on such outward supply of services.

2. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT

Whether Input Tax Credit on goods and services used in construction of hotel will be available to the applicant engaged in providing taxable services of hotel accommodation and related services?

3. PERSONAL HEARING

In the matter personal hearing was granted to the applicant on 28.11.2019. However, the applicant has requested for withdrawal of the application vide letter dated 22.11.2019.

4. COMMENTS OF THE JURISDICTIONAL OFFICER

The jurisdictional officer (Deputy Commissioner, Central Tax, CGST Division-H, Sector-10, Vidyadhar Nagar, Jaipur, Rajasthan 302039) has submitted her comments vide letter dated 18.11.2019 which can be summarized as under:

“Input tax credit of input and input services used in construction of hotel for which output supply is taxable will not be available in reference to Section 17(5)(d) of GST Act, 2017.”

5. FINDINGS, ANALYSIS & CONCLUSION:

The applicant has requested for withdrawal of the advance ruling application vide their letter dated 22.11.2019. Accordingly, no advance ruling is given.

6. In view of the foregoing, we rule as follows: –

RULING

Since the applicant has withdrawn the application, therefore, no ruling is given.