Tax Management India. Com
                        Law and Practice: A Digital eBook ...

☞ Data-bank

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Articles News D. Forum
Highlights
What's New  Latest Cases 

Share:      

        Home        
 
Article Section
Home Articles Goods and Services Tax - GST CA Bimal Jain Experts This
← Previous Next →

ITC available on GST charged by contractor supplying service of works contract to extent of machine foundation

Submit New Article

Discuss this article

ITC available on GST charged by contractor supplying service of works contract to extent of machine foundation
By: CA Bimal Jain
December 18, 2021
All Articles by: CA Bimal Jain       View Profile
  • Contents

The Hon’ble AAR Telangana in the matter of IN RE: M/S. VIJAYNEHA POLYMERS PRIVATE LIMITED [2021 (12) TMI 473 - AUTHORITY FOR ADVANCE RULING, TELANGANA] held that, Input Tax Credit (“ITC”) can be availed on GST charged by contractor supplying service of works contract to extent of machine foundation as per Section 17(5)(c) of the Central Goods and Services Tax Act, 2017 (“CGST Act”).

Facts:

M/s. Vijayaneha Polymers Pvt. Ltd. (“the Applicant”) has constructed a factory building wherein they have hired works contractors for executing the construction by way of providing material where contractor provided construction services or the contractor provided both material and services.

Such construction included foundation of machinery, rooms for chillers, boilers, generators and transformers, erecting of electrical poles, laying of internal roads, factory building, internal drainage, laboratory etc.,

Issue:

Whether ITC is available on GST charged by the contractor supplying service of works contract?

Held:

The Hon’ble AAR Telangana in IN RE: M/S. VIJAYNEHA POLYMERS PRIVATE LIMITED [2021 (12) TMI 473 - AUTHORITY FOR ADVANCE RULING, TELANGANA] held as under:

  • Observed that, the Applicant has either purchased goods or services for construction of immovable property on his own account or engaged the works contractor for supply of construction services.
  • Analysed Section 17(5) of the CGST Act and opined as under:
  • ITC cannot be availed on works contract services for construction of an immovable property except for erection of plant & machinery.
  • ITC can be availed on plant & machinery as defined in the explanation to Section 17 i.e., on apparatus, equipment & machinery fixed to earth by foundation or structural support; which means plant & machinery and machine foundation are eligible for ITC.
  • Plant & machinery will not include building or other civil structures and pipelines laid outside factory premises.
  • ITC cannot be availed on goods or services or both received by a taxpayer on his own account for construction of immovable property.
  • Held that, the Applicant would be eligible for ITC to the extent of machine foundation only.

(Author can be reached at info@a2ztaxcorp.com)

 

By: CA Bimal Jain - December 18, 2021

 

Discussions to this article

 

Sir,

What is meant by the term "Other civil structure" in reference to Plant & machinery.

By: OmPrakash jain
Dated: 19/12/2021

 

Discuss this article

 
← Previous Next →

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Site Map - Recent || Site Map || ||