TMI Blog2021 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter 99, Heading 9964 and Service Code 996415? (b) Whether the rate provided in Notification No.11/2017-Central Tax (Rate) dated 28-06-2017 and Notification No.8/2017-Integrated Tax (Rate) dated 28-06-2017 under heading 9964 and description in point (vii) having a GST rate of 18% is applicable for the service rendered by this applicant? 2. Whether the applicant is entitled to claim Input Tax Credit as detailed above. 5. Contentions of the Applicant: 5.1. Section 97 (2) of the Central Goods and Services Act, 2017 stipulates the questions on which an advance ruling may be sought. An identical provision is contained in Section 97(2) of the Kerala Goods and Services Tax Act 2017. The advance ruling is sought on the issues relating to clauses of section 97 (2) (a) (d) relating to issue of classification and input tax credit availability respectively. 5.2. The service of hiring house boat along with rooms and food and beverages (excluding alcohol) at a consolidated rate comes under classification 996415 (Local water transport services of passengers). Reference is made to the Explanatory Notes to the Scheme of Classification of Services under GST. In Chapter 99 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passenger transport service. 7. Personal Hearing: The applicant was granted opportunity for personal hearing on 06.01.2021. The authorised representative of the applicant attended the personal hearing. He reiterated the contentions made in the application and requested to issue the ruling on the basis of the submissions made by them. 8. Discussion and Conclusion: 8.1. The matter was examined in detail. The issues to be decided are; (1) the classification of the services rendered by the applicant; (2) the rate of tax applicable for the service rendered and (3) the eligibility of the applicant for ITC. 8.2. The applicant is operating a resort at Alapuzha District. In connection with the same, house boats are being acquired and furnished by the applicant. The house boats are used for overnight cruises and day trips. Meals are provided as part of package. If alcohol is provided, it will be billed separately and Kerala General Sales Tax will be charged. The boarding point may or may not be the point of disembarkation. The boats procured are furnished with state- of- the- art bedrooms, dining rooms, halls and kitchens. The rate proposed to be charged by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be claimed. Section 16 of the CGST Act pertains to eligibility and conditions for taking input tax credit. Sub-sections (1) to (4) of Section 16 prescribes the basic I essential conditions to be satisfied for availing/ taking input tax credit. Sub-section (1) provides that every registered person shall subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course of furtherance of his business and said amount shall be credited to the electronic credit ledger of such person. 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 purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. 8.5. We have already come to the conclusion that the services rendered by the applicant are classifiable under SAC - 9964 - Passenger transport services and accordingly 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. In view of the observations stated above, the following rulings a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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