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2024 (3) TMI 319 - AAR - GSTBlocking of credit - Reversal of Input Tax Credit - services supplied by Larsen and Toubro Ltd in connection with the construction of runway and passenger terminal building of the applicant - ineligible credits that the applicant has taken in respect of certain supplies specifically listed in the statement of relevant facts in Annexure-1 or not - HELD THAT:- The provisions of Section 17(5)(c) and 17(5)(d) of the CGST Act relate to blocking of ITC in relation to goods or services or both used for construction of immovable property. The provisions of both the said sub-sections are to be read along with the explanations given after section 17(5) (d) and section 17(6). The provisions of both clauses (c) and (d) are inter-linked to each other and are to be read conjointly. The applicant has entered into two common contracts with L&T; the first one being EPC contract for construction of Runway with Basic Strip, Turning Pads, Taxiways, Apron, Access Roads, Drainage System, Related Retaining Structures, Formation of Platforms for Landslide Facilities, and installation of Airfield Ground Lighting System, Visual Aids for Navigation and Bird Hazard Reduction System etc and the other being for construction of Passenger Terminal Building [PTB] with ATC, substations, installation of HVAC system, Plumbing, Fire Alarm, Fire Fighting System, CCTV, PA system, Flight Information Display system, Interior Design, internal and external finishing, Building internal access control system, Hydro pneumatic pumping system for buildings, STP, and rain water harvesting system etc. - the predominant and principal supply involved in both the contracts is construction of immovable property hence the contract cannot be artificially vivisected to consider it a contract for supply of various goods / services as contended by the applicant and the eligibility of input tax credit determined accordingly. The supply of goods/services are integral part of the overall contract for supply of works contract services for construction of immovable property and hence the entire input tax credit of tax paid on the works contract services as per the Running Bills of L & T are not eligible being blocked credit in terms of provisions of Section 17 (5) (c) of the CGST Act, 2017.
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