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2020 (11) TMI 1052 - AAAR - GSTInput tax credit - purchase of Paver Blocks, laid on the land which are being used by them in the course of providing their taxable output supply to their customers - Laying of the Paver Blocks on the land amounts to construction of immovable property under Section 17(5)(d) of the CGST Act, 2017 or not - capitalization of expenses on the Paver blocks - HELD THAT:- The immovable property inter-alia includes the things which are attached to the earth. Now, in the present case, it has been submitted that the 'Paver Blocks' are laid on the surface of the automobiles stock yard with the aid of the filling material, i.e. sand and the outer wall, constructed at the automobiles stock yard. Here, it is amply clear that the filling materials, i.e. sands and the outer walls helps the 'Paver Blocks” to remain attached and fixed to the Earth - Once it has been established that the 'Paver Blocks' are attached to the land/surface, the same is considered as an immovable property in terms of its definition provided under the General Clauses Act, 1897. The Appellant has contended that the MAAR did not appreciate the technical nature, mobility and characteristics of the 'Paver Blocks' before holding the laid out 'Paver Blocks' as an immovable property. It has further been contended that the subject 'Paver Blocks' can easily be moved from one place to another without being damaged and re-erected there, thereby, conforming to the inherent nature of movable property. In this regard, it is observed that the 'Paver Blocks', once laid over the surface to comprise the parking system, cannot be moved “as it is” to another place as the same is also supported by the edge restraints provided by the outer wall constructed along the perimeter of the parking area of the said stock yard, which causes the paver blocks to get fastened or embedded to the earth permanently - The fact that it would clearly not be intention of the Appellant to move these 'Paver Blocks' from one place to another, lends certain degree of permanency to the 'Paver Blocks' laid over the surfaces, which is the essential characteristics of the immovable property. The issue which is important here is whether it was the intention of the Appellant to dismantle the paver blocks. It is seen that the Appellant has taken over the land on lease for a period of 5 years. It can be deduced from it that the paver blocks are intended to be a permanent structure and there is no intention to dismantle it frequently and take it to any other place. On perusal of Section 17(5)(d) of the CGST Act, 2017, it is observed that the clause “to the extent of capitalization, to the said immovable property” is applicable only with respect to the reconstruction, renovation, additions or alterations or repairs of the said immovable property, and not with respect to the original construction work of an immovable property. In the present case, the laying of 'Paver Blocks' over the surface of the stock yard would not come under the ambit of the aforesaid explanation as the same cannot be categorized as reconstruction, renovation, additions or alterations or repairs of an immovable property. The laying of 'Paver Blocks' will rather be construed as original construction work of immovable property which in the present case is 'parking system'.
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