No Double Dipping: Karnataka AAR Rejects GST Subsidy Query Amid Ongoing Proceedings Under Section 98(2)
No Double Dipping: Karnataka AAR Rejects GST Subsidy Query Amid Ongoing Proceedings Under Section 98(2)
The present advance ruling (No. KAR ADRG 29/2025) dated July 28, 2025, has been filed by a company named M/S. Cheftalk Food and Hospitality (Applicant) under Section 97 of the CGST Act, 2017 and Section 97 of the KGST Act, 2017, in form GST ARA-01, discharging the fee of Rs. 5,000 each under the CGST Act and the KGST Act. The company possesses a registered address at 1st, 2nd and 3rd Floor, Site No.1, House List No.2, 18th Cross, 5th Ward, Munireddy Layout, Mangammanapalya, Bangalore – 560068, with a GSTIN or User ID: 29AAFCC7584D1ZE.
The applicant here, i.e., M/S. Cheftalk Food and Hospitality is a private company registered under the rules of the CGST (Central Goods and Services Tax) Act 2017 and the KGST (Karnataka Goods and Services Tax) Act 2017. The applicant is involved in offering food catering services to distinct corporates and also supplies food to Indira Canteen according to the orders, and therefore, the applicant seeks an advance ruling to know, “Whether the subsidy received from the state government forms part of the consideration under section 2(31) of the CGST Act.” Meaning, the company wanted to get clarity from the tax authorities by seeking an advance ruling on whether this subsidy amount should be included in the value of the supply for GST purposes under Section 2(31) of the CGST Act, which defines the term “consideration”.
Questions Asked by Appellant:
The appellant, M/S Cheftalk Food and Hospitality, has asked the following question, seeking the Karnataka Advance Ruling No. KAR ADRG 29/2025, dated July 28, 2025:
“Question: Whether the subsidy received from the state government forms part of the consideration under section 2(31) of the CGST Act.”
What Did the Ruling Say?
In accordance with the Authority for Advance Ruling in Karnatakа Goods and Services Tax Vanijya Therige Karyalaya, Kalidasa Road, Gandhinagar, Bengaluru – 560 009, the following answer has been given to the above question:
Answer: The Karnataka Advance Ruling has rejected the application filed by M/S Cheftalk Food and Hospitality under Section 98(2), proviso (i) of the CGST Act, 2017, which clearly says that an advance ruling application will not be allowed if the same quesry or question is have already been decided in another legal or tax proceeding involving the same applicant.
In the present case, the department discovered that proceedings had already been started on the same issue relating to the same company. Additionally, an Audit Report was issued on 25th November 2024 by the Deputy Commissioner of Commercial Taxes (Audit), meaning the tax department had already started the investigation into the same matter.
During the personal hearing on June 05, 2025, the company’s representative, an FCA, attended the hearing and confirmed that proceedings were already going on the same matter relating to the same applicant. Considering these facts, the authority dismissed the current application, saying the law does not allow the same matter to be dealt with in two parallel proceedings.