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2019 (2) TMI 1527 - APPELLATE AUTHORITY FOR ADVANCE RULING, ODISHAInput Tax credit - inputs and input services used by for maintenance of its township/residential colony, guest house/transit house/training hostel, hospital, horticulture and maintenance & security service in townships - Challenge to AAR Decision - Held that:- The ruling of the AAR that inward supplies received by the Appellant-I by way of management, repair, renovation, alteration or maintenance service or goods received for furnishing the residential colony shall not qualify for input tax credit is found to be correct. Expenditure incurred by the Appellant-I towards construction, reconstruction, renovation, additions or alterations or repairs to the residential colony is not eligible for input tax benefit if the said expenditure has been capitalized. Moreover, provision of housing to its employees by the Appellant-I is nothing but a perquisite. As clarified by the CBIC vide its Press Release dated 10.10.2017, referred to by the Appellant-I, perquisites are not subjected to GST. Therefore, since the perquisites are outside the scope of GST, input tax credit shall not be available to the Appellant-I in respect of tax paid on goods and services procured by it for management, repair, renovation, alteration or maintenance services (including watch and ward services, security services, Plantation/Gardening/Landscaping services, etc.) pertaining to residential accommodation for its employees in township/colony. Input and input services for maintenance of guest house, transit house and trainee hotel - Held that:- The guest house of the Appellant-I is used for temporary accommodation of its employees as well as non employees. Thought the provision of guest house may not be treated as a perquisite, it cannot also be treated as an activity integrally related to the business of the Appellant-I. That means, the guest house service provided by the Appellant-I to its employees as well as non-employees cannot be treated as an activity in course or furtherance of its business - the tax paid on inward supplies of goods and services in connection with the guest house cannot be allowed the benefit of input tax credit - Decided against assessee (Appellant-1) Services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments - Held that:- Creation and maintenance of green area/zone inside plant/mining/office premises is a business necessity for controlling pollution as well as atmospheric temperature. It is also a requirement for preventing soil erosion. This is also mandated in various laws under which the Appellant-I conducts its business such as the Forest Conservation Act, the Environment Protection Act, etc. Therefore, such activities are integral to the business activity of the Appellant-I and hence can be treated as activities in course or furtherance of its business. - Credit allowed - Decided against Revenue (Appellant-11) It is established that to claim input tax credit, an input service must be integrally connected with the business of manufacturing the final product Cost of an input service forming part of the cost of final product alone cannot be a condition to allow the benefit of input tax credit. The appeal filed by M/s.National Aluminium Company Ltd (Appellant-I) fails, whereas the appeal filed by the Commissioner of CX & GST, Bhubaneswar (Appellant-II) succeeds partially - The ruling of the Odisha Authority for Advance Ruling in RE: M/S. NATIONAL ALUMINIUM COMPANY LTD., (NALCO)[2018 (10) TMI 748 - AUTHORITY FOR ADVANCE RULING, ODISHA] allowed in part.
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