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2019 (4) TMI 1500 - AAAR - GSTCENVAT Credit - Post GST Regime - cancellation of flat which is booked in pre-GST Regime and cancelled in post-GST Regime in two scenarios (i.e. cancelled with some retention amount or without any retention amount.) - Whether the Service Tax/VAT paid earlier can be claimed as credit or allowed as refund to property buyers? - challenge to AAR decision. HELD THAT:- If flat was cancelled in pre-GST regime as per the aforesaid rule of Service Tax Rules, 1944 taxpayer allowed to avail credit of such excess service tax paid if an invoice is issued for which service is not provided - However, as transaction is cancelled in GST regime the reference of the transitional provision of GST law can be taken to determine the availability of deduction for taxes which were already paid under GST law. The cancellation of flat shall be equated with the downward revision of price to allow the benefit available to the builder in erstwhile law. Time limit should apply from date of cancellation as that is the trigger point (and not payment of tax) - Law cannot enforce impossible condition to claim within one year if the contract is cancelled after 1 year (say in July 2018). Availability of MVAT Paid in Pre-GST regime - HELD THAT:- Section 142(1) of the MSGST Act is applicable in the given scenario to the extent of value of goods cancelled. (i.e. to the extent of VAT paid) - As per section 142(2) of the CGST Act, in case of downward revision of price a registered person can issued the credit note for the contract entered in Pre-GST regime and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act. The substantial benefit should not be denied to the applicant because of new law which assessee was eligible under pre-GST regime - it is settled position in law that procedural aspect should not take away substantial benefits of the assessee. Reading both the above provisions viz.- Clause (63) and (62) together, it is aptly clear that the question enumerated at (d) of Section 97(2), supra does not deal with the admissibility of the credit of taxes paid other than the taxes mentioned in the Clause (62) of Section 2 of the CGST Act, 2017, which has been cited herein above, In other words, Section 97(2), which encompasses the questions, meant for the ruling by the AAR or AAAR, does not deal with the input tax credit of the service tax or VAT paid under the existing laws. Since the Appellant has raised questions on the admissibility of the credit of the service tax and VAT paid under the pre-GST regime, it is held that neither AAR nor AAAR has the jurisdiction to pass any ruling on such matters. The ruling of AAR upheld.
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