9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 920 - AAR - GSTAvailment of ITC - WCS taken for structure on which machineries are fixed to earth by foundation and services taken for setting up plant ie MS steel structure along with roof which has been created mainly to protect machineries being supported by the said foundation - Steel TMT bar being procured by the applicant company and used while taking works contract services for making the said foundation to fix machineries to earth. HELD THAT - On examining the contention of the applicant read with the certificate of the chartered engineer a bare look at the photographs provided by the applicant when seen in conjunction to what is mentioned in section 17 ibid which deals with apportionment of credit and blocked credits we find that the law is unambiguous as far as ITC is concerned in respect of the P M. ITC is not available in respect of works contract services when supplied for construction of an immovable property. Further ITC is not available for goods services or both received for construction of an immovable property even when used in the course or furtherance of business. However the sub-clauses specifically exclude in both the cases plant and machinery. Sand Mill and Spray Dryer - HELD THAT - On going through the two photographs it is found that claim of ITC by the applicant in so far as the foundation and structural support for the Sand mill Spray dryer is covered by the explanation 2 to Section 17(5) and hence the applicant is eligible for the ITC provided it is not capitalized. However the eligibility is only in respect of the foundation and the structural support. The photograph reveals a structure/shed erected on the left side of the Sand mill and spray dryer. This structure/shed would clearly fall within the ambit of civil structure and stands excluded from the expression plant and machinery . Hence the ITC in respect of this structure/shed is blocked in terms of section 17(5) of the CGST 2017. HAG (Hot Air Generating machine and equipment - HELD THAT - On going through the photograph it is found that claim of ITC by the applicant in so far as the foundation and structural support in respect of the HAG is concerned is covered by the explanation 2 to Section 17(5) and the applicant is eligible for the ITC provided it is not capitalized. However the eligibility is only in respect of the foundation and the structural support for the HAG machine only. The photograph clearly depicts that there is a roof overhead the machine. This roof and its supports would clearly fall within the ambit of civil structure and stands excluded from the expression plant and machinery . Hence the ITC in respect of this structure/shed ie roof and its supports is blocked in terms of section 17(5) of the CGST 2017. ETP Effluent Treatment Plant - HELD THAT - On going through the four photographs it is found that these are basically tanks which are civil structure. Now in terms of the discussion expression plant and machinery excludes civil structure. Therefore when the ETP itself has been held to be a civil structure the question of allowing ITC in respect of its foundation and structural support does not arise. Therefore the applicant is not eligible for the ITC in respect of the foundation made to install the ETP effluent treatment plant . The view as expressed is substantiated by the ruling in the case of 2019 (7) TMI 1736 - AUTHORITY FOR ADVANCE RULING HARYANA wherein it was held that it is clear that plant and machinery means apparatus equipment and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but with some exclusions as above. In the present case the applicant admits that the Sewage Treatment Plant is attached with the civil structure of the building. Thus it is clear that it is a part of the civil structure of the building and part of the building so constructed. Therefore the applicant s contention that the Sewage Treatment Plant is covered under the definition of plant and machinery is rejected - thus the analogy of the water treatment plant sewage treatment plant is applicable even to ETP. Transformer - HELD THAT - Following the ratio of the ruling in the case of IN RE M/S. TARUN REALTORS PVT. LTD. 2020 (3) TMI 981 - APPELLATE AUTHORITY FOR ADVANCE RULING KARNATAKA it is held that the applicant is not eligible for ITC on works contract services taken for making foundation structure on which DG set is fixed to earth by foundation.
Issues Involved:
1. Eligibility of ITC on works contract services and materials for foundation and structural supports for specific machinery. 2. Eligibility of ITC on steel (TMT bars) used in foundation for machinery. Summary: Issue 1: Eligibility of ITC on Works Contract Services and Materials for Foundation and Structural Supports for Specific Machinery Sand Mill and Spray Dryer: The claim of ITC for the foundation and structural support for the Sand Mill and Spray Dryer is covered by the explanation 2 to Section 17(5) of the CGST Act, 2017, making the applicant eligible for ITC, provided it is not capitalized. However, ITC on the structure/shed erected on the left side of the Sand Mill and Spray Dryer is blocked as it falls under civil structure. HAG (Hot Air Generating Machine and Equipment): The foundation and structural support for the HAG machine are eligible for ITC under explanation 2 to Section 17(5), provided it is not capitalized. However, ITC on the roof and its supports over the HAG machine is blocked as it is considered a civil structure. ETP (Effluent Treatment Plant): The ETP is considered a civil structure, and ITC for its foundation and structural support is not allowed. This view is supported by rulings in the cases of Synergy Global Steel Pvt. Ltd. and Tarun Realtors Pvt. Ltd., where similar structures were excluded from the definition of "plant and machinery." Transformer: The applicant is not eligible for ITC on works contract services for the foundation structure on which the DG set is fixed to earth by foundation. This follows the ruling in the case of Tarun Realtors Pvt. Ltd. Issue 2: Eligibility of ITC on Steel (TMT Bars) Used in Foundation for Machinery Steel (TMT bars) procured by the applicant and used in works contract services for making the foundation to fix machinery to earth is eligible for ITC, subject to the findings recorded in paragraph 19 onwards. Ruling: 1. WCS for Foundation and Structural Supports: - Eligible for ITC for Sand Mill and Spray Dryer, and HAG machine foundations and supports, excluding civil structures like sheds and roofs. - Not eligible for ITC for ETP and Transformer foundations and supports. 2. Steel (TMT Bars): - Eligible for ITC when used in the foundation for fixing machinery to earth, subject to specific findings.
|
