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2020 (10) TMI 48 - AAAR - GSTMaintainability of application - Whether the impugned advance ruling, being allegedly obtained by the Respondent by suppressing the material facts regarding the investigation initiated against him by the DGGI, PZU on the same issues as those raised in the subject advance ruling application, is sustainable in terms of proviso to section 98(2) read with section 104 of the CGST Act, 2017, or not? - HELD THAT:- the investigation proceedings were initiated under the Service Tax and not under the CGST Act. Therefore, Section 98(2) is not attracted as there was no proceeding pending under the provisions of the CGST Act. Levy of GST - prize money received from the horse racing clubs for winning the horse race competition - Taxable supply or not - HELD THAT: - By applying the definition of “Supply” to the facts and circumstances of the case at hand, it is observed that no service has been provided by the Applicant- Respondent to the racing clubs for the Prize money/ stakes received from such clubs, as it is not in dispute that not all horse owners, who agree to provide their horses to such race organising clubs, get this consideration in the form of the said prize money/ stake from such clubs. Only those horse owners receive these considerations whose horses win the races organized by such clubs. Thus, there is no direct nexus between the activities carried out by the horse owners, viz.by providing thoroughbred horses to race clubs for organising horse race events, and the prize money received by such horse owners. The Applicant-Respondent has himself contended in their submissions as reproduced herein above that for the occurrence of any taxable event, there must be direct and immediate link between the supply made and the consideration received. He has also cited few judicial pronouncements to strengthen his arguments. However, as discussed, in the present facts and circumstances, this clause of direct and immediate link between the supply and consideration is absolutely absent in the present situation. As such, it would not be construed as taxable supply /events. The applicant- respondent had contended that they provide service to the Club and that the contract is a conditional contract and therefore there is supply. The applicant-respondent has argued there may be a conditional contract here and we might assume that for the moment. But not every contract becomes taxable under the CGST law. Every supply is a contract but not every contract is a supply. In order to levy tax under the CGST Act there should be supply of goods/ service and there should be consideration - We have already delineated in detail as to how there is no service provided in the present case and therefore the argument of the appellant is not acceptable. Whether they would be eligible to avail ITC in respect of the expenses incurred on the entry fee paid to the horse racing clubs, training charges paid to the trainers, amount paid to the jockeys, etc.? - HELD THAT:- Since there is no taxable supply by the Applicant Respondent in the present arrangement, there is no question of availment of ICT as per the provisions of section 17 (2) of the CGST Act, 2017 - thus, it is abundantly clear that input tax credit is restricted to the portion of taxable supplies only. Therefore, in the present case, the Applicant- Respondent will not be eligible to avail ITC in respect of any input supply including the entry fee, the training charges paid to the horse trainers and the charges paid to the jockeys, etc. The prize money/ stakes will not be subject to GST in the absence of any supply - the Applicant- Respondent is also not entitled to avail any ITC in accordance with the provisions of section 17 (2) of the CGST Act, 2017 - The AAR decision set aside.
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