ITC to be reversed in view of sale of alcoholic liquor for human consumption effected from business premises: AAAR

The Appellate Authority for Advance Ruling (West Bengal AAAR) in the matter of Karnani FNB Specialities LLP has ruled out that ITC to be reversed in view of sale of alcoholic liquor for human consumption effected from business premises.

The appellant is engaged in business of providing restaurant service from their lounge bar called “The GRID” and is also providing catering services as well as banquet renting services from their banquet called “The Almond”. The restaurant service is provided from the premises located at Haute Street Building, 86A, Topsia Road South, Kolkata while the banquet/catering services is being provided from the premise located at Bengal Eco Intelligent Park, EM-3. EM Block, Sector V, Bidhannagar, Kolkata. The appellant supplies various goods and services from the said premises and pays appropriate GST.

The Question and Ruling are as follows:

Whether or not the applicant is obliged to reverse ITC under Section 17(2) of the CGST Act read with Rule 42 of the CGST Rules, in view of the sale of alcoholic liquor for human consumption effected by it at its premises under the facts and circumstances of the case?

Ruling: Under the facts & circumstances of the present case, the applicant is required to reverse input tax credit (ITC) in terms of sub-section (2) of section 17 of the GST Act read with Rule 42 of the GST Rules for sale of alcoholic liquor for human consumption.

For Official Ruling Download PDF Given Below: