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2021 (4) TMI 882 - AAR - GSTInput tax credit of GST paid - goods and services for laying of transfer pipeline for transporting Propane/Butane from Jetty to the Terminal - goods and services for construction of refrigerated storage tank at Terminal - goods and services for construction of Fire Water reservoir which is a part of firefighting system - goods and services used for foundation and structural support for such reservoir. HELD THAT:- The construction of Refrigerated Storage Tanks and Fire Water Tanks are undertaken by the vendors of the applicant as Works Contract’. The vendors as per the Purchase Orders are to undertake the construction as an EPC and is to handover after successful demonstration of Performance Guarantee (PG) parameter. In respect of ‘Pile foundation works’ for the project site, it is seen that the entire work is undertaken by the vendor as Works Contract’ as the scope of work includes the entire spectra of activity from Mobilisation to loadtest. The civil & structural works for CCPL is again executed as Works Contract - The applicant sources Pipes on their own account for getting it laid and the said pipes are laid as a ‘Works Contract’ including the foundation and structural supports; the Storage Tanks and water tanks along with the foundation are sourced as ‘Works Contract’; the pile foundation for the entire project site is sourced as ‘Works Contract’. It is not in dispute that the Pipelines, storage tanks and water tanks are put in place for furtherance of their business and thereby the tax paid on these becomes eligible credit subject to limitations under Section 17(5) of the Act as these are constructed under ‘Works Contract” and the resultant is an immovable property. Goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline - HELD THAT:- It is seen that the applicant sources Pipes on own account and the same is laid as a “Works Contract’ including the foundation. Section 17(5) restricts the credit on such goods received for construction & Works Contract service received except when such ‘goods/Works Contract’ services are availed in respect of ‘Plant and Machinery’ and Explanation, which defines ‘Plant and Machinery’ restricts credit on the ‘Pipelines laid outside the factory’. The Explanation specifies that apparatus, equipment, and machinery fixed to earth by foundation, used for making outward supply of goods is ‘Plant and Machinery’ and there are specific exclusions, which include ‘Pipelines laid outside the factory premises’ The Act clearly states what constitutes ‘Plant and Machinery’ and in that what is excluded i.e. apparatus, equipment, machinery-used for making outward supplies and fixed to earth by foundation or structural support constitutes ‘Plant and Machinery’ and the ‘Pipelines laid outside the factory premises’ are excluded from the ambit of ‘Plant and Machinery’ for the purposes of eligible Credit - it is evident that the intention of the GST Law is to exclude ‘Pipelines laid outside the factory premises’ from the definition of ‘Plant and Machinery’. In Ute ease at hand, the applicant has slated that the pipelines approximate length of around 4.1 Km are to be laid from jelly to the Terminal and accordingly, we hold without any hesitation that the credit of Pipes and Pipelines laid outside the factory’ is not available for the applicant. The decisions relied upon by the applicant is based on the earlier laws and do not have any application while considering the GST Provisions, in as much as the GST law has clearly defined what is to be considered as ‘capital goods’. ‘Plant and Machinery’ and the specific exclusions. The applicant is not eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline for transporting propane/Butane from jetty to the Terminal as pipelines laid outside the factory premises as being restricted under Section 17(5) of the act read with the Explanation thereof. Refrigerated storage tanks - HELD THAT:- The Explanation in Section 17 of the Act defines. ‘Plant and Machinery’ as an apparatus, equipment, machinery fixed to earth by the foundation or structural support used for making outward supply and excludes land building and civil structure. So we find that the moot point to be decided is whether the ‘refrigerated storage tank’ falls under the class of apparatus, equipment, machinery and the proposed foundation or structural support claimed falls under the ‘foundation’ or ‘civil structure’ - the Propane/Butane is stored, processed and maintained in refrigerated storage tanks before being dispatched to the end customers as per their requirements. Refrigerated storage tanks are constructed in a manner which can facilitate storage of Propane/ Butane and maintain its characteristics. It is built with certain equipment along with the concrete inputs to enable it to perform the said functions. Therefore, it is clear that these tanks are used for making outward supply’. Eligibility of credit of tax paid on construction of water lank to follow the fire protection measure al Terminal - HELD THAT:- The applicant is eligible for availment of input tax credit of GST paid on goods and services for setting up of Fire Water reservoir (tank) including the structural support thereon as per the Purchase Order No 4500405071 dated 11.03.2020 subject to the condition that the tanks are capitalized in their books of accounts as ‘Plant and Machinery’ and not as Immovable Property” and the applicant are not eligible to avail input credit of goods and services used for ‘Pile foundation’ and input credit on goods and services used for such pile foundation.
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