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2021 (7) TMI 534 - AAR - GSTClassification of services - resort providing various other services - providing house boat for cruises - meals were provided as part of package - Alcohol provided, if any, is to be billed separately - classified under the Chapter 99, Heading 9964 and Service Code 996415? - N/N. 11/2017-Central Tax (Rate) dated 28-06-2017 and N/N. 8/2017-Integrated Tax (Rate) dated 28-06-2017 - Input Tax Credit. HELD THAT:- The Scheme of Classification of Services is notified as Annexure to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. Chapter 99 - Heading - 9964 pertains to passenger transport services and 996415 pertains to local water transport services of passengers by ferries, cruises and the like. The Explanatory Notes to the Heading 996415 states that the service code includes inland water cruises that include transportation, accommodation, food and other incidental services in an all-inclusive fare. The services rendered by the applicant as detailed above squarely falls under the Heading 996415 in view of the explanatory note and hence the services are appropriately classifiable under SAC 996415. Applicable rate of GST - HELD THAT:- The entry at SI No. 8 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 pertains to the rate of tax applicable for services falling under Heading -9964 - Passenger transport services - services rendered by the applicant that are classifiable under Heading 996415 is covered by the above entry in Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and is accordingly liable to GST at the rate of 18%. Eligibility for ITC - HELD THAT:- Section 17 of CGST Act pertains to apportionment of credit and blocked credits. Sub-section (5) of Section 17 specifies the list of goods and services in respect of which input tax credit is not available except under the situations specified therein. Vessels, food and beverages are included in the list specified in Section 17 (5) and hence input tax credit of tax paid on vessels and in the repair and maintenance of vessels and in respect of food and beverages are not available except when they are used for the purposes specified therein. The applicant is eligible for the input tax credit in respect of the expenses incurred by them on refurbishing, furnishing, maintaining and repairing the vessel as the supplies are used for providing the taxable outward supply of passenger transport services specified in the exclusion clause in Section 17 (5) (aa) (i) (B) of the CGST Act - The applicant is also eligible for input tax credit on the supply of food during the cruise as the supply is an element of the outward taxable supply of passenger transport services and hence covered by the proviso to Section 17 (5) (b) (i) of the CGST Act.
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