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2024 (2) TMI 1059 - AAR - GSTClassification of supply - supply of hiring services of air conditioning system and fire extinguishing system - Rate of CGST and SGST - to be charged under SAC Code 997314 or not - composite supply or mixed supply - eligibility of avail ITC - HELD THAT:- The hiring of air conditioning machine and fire extinguisher would attract tax @ 28% and @ 18% respectively being the same rate applicable for supply of such items and when such are supplied in conjunction with each other for a single price, the supply being a mixed supply would attract tax @ 28%. However, in the instant case, air conditioning system and the fire extinguishing systems which have been installed in the building have lost its character of a movable property and thereby cannot be regarded as goods. In COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD VERSUS SOLID & CORRECT ENGINEERING WORKS & ORS. [2010 (4) TMI 15 - SUPREME COURT] the Hon’ble Supreme Court of India observed that attachment of the plant in question with the help of nuts and bolts to a foundation intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth. The court further held that manufacture of the plants in question do not constitute annexation hence cannot be termed as immovable property. However, in the case at hand, there can be no dispute in this regard that the intention of annexation of air conditioning system and fire extinguishing system involves significant degree of permanence. Further, contrary to the observation made by the Hon’ble Apex court that ‘the plant can be moved and is indeed moved after the road construction or repair project’, air conditioning system and fire extinguishing system are not intended to be moved and indeed not moved after they are installed in the building. In the instant case, rate of tax on supply of hiring services of air conditioning system and fire extinguishing system would not be determined vide serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. According to our view, each of the supplies would attract tax @ 18% under serial number 17(viii) of the said notification as leasing or rental services and therefore, the supply received by the applicant from TCGUIH, being a mixed supply, would also be taxable @ 18% i.e., supply which attracts the highest rate of tax. Whether the applicant is eligible to avail the credit of tax being paid by him to the supplier? - HELD THAT:- A registered person is eligible to avail credit of input tax if all the conditions laid down in section 16 of the GST Act get fulfilled and such credit is not restricted under sub-section (5) of section 17 of the Act ibid. - In the instant case, tax paid by the applicant on hiring charges is not restricted under sub-section (5) of section 17 of the Act. As a result, the applicant is entitled to take credit of input tax charged by his supplier namely TCGUIH subject to fulfillment of all the conditions under section 16 of the GST Act.
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