Ruling should be pronounced by same members of AAR who heard the case: AAAR

In re Umed Club (GST AAAR Rajasthan)

Introduction: The Appellate Authority for Advance Ruling (AAAR) in Rajasthan emphasized the necessity for the same members of the Authority for Advance Ruling (AAR) to pronounce rulings. This was in response to Umed Club’s appeal regarding a ruling made on 27.09.2021. Umed Club argued that the ruling was based on an amendment not yet operational at the time, questioning its validity. The AAAR concurred, setting aside the previous ruling and remanding the matter back to the AAR for a fresh decision after considering all contentions.

Understanding the Case: M/s Umed Club sought clarity on the taxability of its services like short-term accommodation, restaurant, and recreational services provided to its members. The AAR, Rajasthan, in its ruling dated 27.09.2021, determined that these services are taxable under GST. Umed Club, dissatisfied with the ruling, filed an appeal before the AAAR.

Grounds of Appeal: Umed Club’s appeal primarily relied on a Supreme Court judgment regarding service tax under the erstwhile regime. They argued that as service tax wasn’t levied on club services previously, the same principle should apply to GST. Furthermore, they contested the retrospective amendment introduced by the Finance Act, 2021, emphasizing that it wasn’t operational at the time of the ruling.

Proceedings and Findings: During the personal hearing, Umed Club reiterated its grounds of appeal and raised concerns regarding procedural irregularities. They highlighted the delay in passing the ruling and the discrepancy in the composition of the AAR members who heard the case versus those who pronounced the ruling.

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