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2021 (1) TMI 496 - AAR - GSTPlant and machinery or not - LNG Jetties proposed to be built by the applicant - input tax credit - Section 16 read with Section 17 of Section 16 of the Central Goods and Services Tax Act, 2017 read with the Gujarat Goods and Services Tax Act, 2017. Whether in terms of Section 17 of the CGST Act, 2017 read with GGST Act, 2017, the LNG jetties proposed to be built by the applicant can be said to be covered within expression ‘plant and machinery’ as foundation to equipment, apparatus, machinery to be installed on it? Whether as per Section 16 read with Section 17 of the said Acts, the applicant can accordingly avail ‘input tax credit’ of GST paid in inputs, input services as well as capital goods procured for the purpose of building the LNG jetties? HELD THAT:- Applicant have entered into a Concession Agreement with the Gujarat Maritime Board (‘GMB’) to, inter-alia, implement the development, construction, operation and maintenance of Liquified Natural Gas (‘LNG’) Port with a Floating Storage and Regasification Unit (‘FSRU’) facility in Jafrabad, Gujarat under the Build, own, Operate and transfer (‘BOOT’) basis and the purpose of the construction of the 2 jetties is for the installation of plant and machinery on it. As per data available online, a jetty, in brief, is a structure generally constructed on plinths or pillars that projects from land out into water. It can also be described as a narrow structure projecting from the shore into the deep water as a landing place for ships i.e. the place where ships or boats stop to let people get on or off, or to load or unload goods. Jetty structure is used to berth the vessels alongside and affords them a working platform and can also be called a landing stage at which boats can dock or be moored. However, as discussed in the para above, in the instant case, the 2 jetties proposed to be constructed by the applicant as per the agreement with GMB is not for the aforementioned purpose but solely for installation of plant and machinery on it for the purpose of regasification of LNG. In short, the construction of the above jetties is nothing but a civil structure or an immoveable property constructed on pillars or plinths extending from the sea shore to the deep sea. On going through the definitions of ‘foundation’, the one thing that we find strikingly common in all of them is that foundations are structures which are located below the ground and support the structures/buildings built above it. Thus, the primary condition for a structure to be a ‘foundation’ is that it is required to be a concrete structure made of stones, bricks, cements etc., which should be located below the ground and give support to the structure/building constructed above it. However, on going through the definitions as well as the details of jetties proposed to be built by the applicant as per their agreement with GMB and comparing the same, we find that the jetties are just civil structures or immoveable property, which are akin to a building wherein the only difference being that buildings are located on foundations below the surface of the ground whereas a jetty is a civil structure which is constructed high above the sea shore and extending into the deep sea, stationed on pillars or plinths - Thus, the jetties, in itself, being civil structures and immovable property constructed above the sea shore and extended into the sea, stationed on pillars and plinths above the earth, cannot be considered or covered under the definition of ‘foundation’. Hence, on this ground itself, we conclude that the said jetties proposed to be built by the applicant cannot, by any stretch of imagination, be called or defined as a ‘foundation’. Whether the ‘plant and machinery’ proposed to be installed by the applicant on the aforementioned jetties would be covered under the definition of ‘plant and machinery’ as defined in Explanation to Section 17 of the CGST Act, 2017? - HELD THAT:- Since the apparatus, equipment and machinery proposed to be installed by the applicant do not satisfy the conditions required to be defined as ‘plant and machinery’, we conclude that the same are not covered under the definition of ‘plant and machinery’ in terms of the Explanation to Section 17 of the CGST Act, 2017. Whether as per Section 16 read with Section 17 of the said Acts, the applicant can avail ‘input tax credit’ of GST paid in inputs, input services as well as capital goods procured for the purpose of building the LNG jetties? - HELD THAT:- Jetties proposed to be constructed by the applicant are civil structures (immoveable property’) which are to be constructed as per their agreement with Gujarat Maritime Board(GMB) - The applicant cannot avail ‘input tax credit’ of GST paid on inputs, input services as well as capital goods procured for the purpose of building the LNG jetties in terms of Section 16 read with Section 17 of the CGST Act, 2017 read with GGST Act, 2017.
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