Home Case Index All Cases GST GST + AAR GST - 2021 (8) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 740 - AAR - GSTAdmissibility of input tax credit - blocked credit or not - GST paid on the procurement of plant and machines including the service of installation and commissioning - Section 16 and 17 of the CGST Act, 2017 - HELD THAT:- The applicant has awarded a singleWork Order dated 1-9-20 to M/s Skai Air Control pvt.ltd., to supply, install and commission HVAC worksfor proposed Factory building, Assembly building, Admin Building, Staff facility(existing) & associated works. We understand that HVAC acronym stands for Heating, Ventilation and Air Conditioning system. The said Work order covers the scope of supply, installation, testing and commissioning( SITC) and maintenance and warranty of subject Airconditioning& Cooling system and the Ventilation system of the applicant and of its performance guarantee at site. The total contract value of the subject supply is inclusive of cost of materials, labour, machineries etc. and that GST will be payable extra at actual as per the statutory norm at the time of billing. The contract value is for the entire scope of supply. The applicant has entered into a work order for supply, installation, erection and commissioning (SITC), maintenance and warranty of HVAC worksin the Building comprising the Factory building, assembly building, the Admin Building and Canteen Building - all the parts of Air conditioning and cooling system get assembled at the site and fitted on the wall and roof and the floor of the building. All the different parts of ‘Air conditioning and cooling system’ after being fitted in the building loose their identity as machines or parts of machines and become a system, namely Air conditioning and cooling system. This AC System is in nature of a system and not machine as a whole. It come into existence only by assembly and connection of various components and parts. Though each component is dutiable to GST, the air conditioning plant as such is not a good under HSN (customs Tariff Heading). We note that Air conditioning unit, however, is dutiable as per HSN but not Air conditioning plant. Whether the air conditioning plant is a movable or immovable property? - HELD THAT:- The supply of centralised air conditioning plant is covered at Section 17(5)(c) CGST Act - section 17(5) CGST Act is a Non obstante sub section, overriding the provisions of section 16(1) and Section 18(1) CGST Act. Ventilation system - HELD THAT:- The ‘Ventilation system’ fitted in the building cannot be taken as such to the market for sale and cannot be shifted from oneplace to another as such to erect at another site. It can be shifted only after dismantling the said system which cannot be called ‘Ventilation system’ after it is. The ‘Ventilation system’ once installed and commissioned in the building is transferred to the building owner and this involves the element of transfer of property, thereby ‘Ventilation system’ supply merits to be classified as work contract supply as the system per se is an immovable property - thus, ‘Ventilation system’ is a combination of various components and partsresulted into an immovable property. Thus, Input tax credit is not admissible on Air-conditioning and Cooling System and Ventilation System, as this is blocked credit falling under Section 17(5)(c) CGST Act.
|