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2024 (3) TMI 260 - AUTHORITY FOR ADVANCE RULING, KERALAAdmissibility of input tax credit - inward supply of services by way of License Fee Recovery (LFR) on leasing of pumps along with the equipment - rate of tax applicable on the inward supply of services of leasing of pumps along with the equipment - HELD THAT:- The question regarding the rate of tax applicable on the service of leasing of pumps and equipment received by them. Though the question is on a matter covered under clause (a) of sub-section (2) of Section 97 of the CGST Act, 2017 the applicant is the recipient of the service. Therefore, the question do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Whether the provisions of sub-section (2) of Section 17 of the CGST Act, 2017 is attracted in the case of the applicant? - HELD THAT:- The applicant is engaged in both taxable as well as exempted supplies and hence the provisions of sub-section (2) of Section 17 which stipulates that where the goods or services or both are used by the registered person partially for effecting taxable supplies including zero-rated supplies and partially for exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies applies to the applicant. The service of leasing of pumps and equipment received by them are undoubtedly common input services that are used for taxable as well as the exempted supplies. Therefore, the applicant is not eligible for credit of the full amount of tax paid on the License Fee Recovery for the service of leasing of pumps and equipment received by them; but only eligible to avail the amount of input tax credit determined as per the provisions contained in Rule 42 of the CGST Rules, 2017.
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