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2021 (8) TMI 730 - AUTHORITY FOR ADVANCE RULING, TAMILNADUEntitlement to avail and utilize ITC - the transfer of leasehold rights in the part property - the GST amount charged by IPL if such transaction is considered to be a supply - HELD THAT:- In the case at hand, it is seen that INOX had paid ‘consideration’ to IPL, for agreeing to part with their rights in the leasehold held by IPL, on the land required by the applicant. IPL had consented against such consideration and applied for withdrawing the leasehold held by them in favour of the applicant and on approval by SIPCOT, the applicant has entered into a lease agreement with SIPCOT on payment of necessary charges as required and acquired the leasehold rights for the land. Thus, it is evident that the amount paid is towards acquiring their entitlement to take on lease the land required for putting up a State of the art Ultra High Purity Cryogenic Liquid Medical and Industrial Oxygen Plant. The applicant is a registered person and therefore is entitled to avail credit of the supplies received by them in the course or furtherance of business as per Section 16(1) of the Act. The applicant has stated that as the ‘Air Separation Unit (ASU)’ which is put up on the land leased is a ‘Plant and Machinery’, the restriction at Section 17(5)(d) is not applicable in respect of the goods and services used for the construction of such Plant and Machinery. Section 17(5) of the Act, starts with the Non-obstante clause, ‘Notwithstanding anything contained in sub-section (1) of section 16’, which indicates that the provisions under Section 17(5) prevails over section 16(1) of the Act. From the explanation of ‘Plant and Machinery’, it is evident that while ‘Plant and Machinery’ includes foundation and structural supports required to fix apparatus, equipment, machinery on the earth, land building or other civil structures are specifically excluded. The services availed from IPL is in relation to acquiring lease of the land. By the specific exclusion in the definition of ‘Plant and Machinery’, as land stands excluded from ‘Plant and Machinery’, the services availed and utilized for acquiring such land on lease is restricted under Section 17(5)(d) of the CGST Act 2017, though the activity is in the course or furtherance of the business of the applicant and the credit of GST if payable on such supply is not eligible as credit to the applicant. The applicant is not entitled to avail and utilize ITC of GST charged by IPL as the same is restricted under Section 17(5)(d) of the CGST/TNGST Act 2017, if such transaction is considered to be a supply.
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