TaxTMI 
TaxTMI 
30 May 2020
1441 Views 
A manufacturing company acquires land nearby it’s existing boundary for expansion of plant. The major part of the acquired land is having high land with big rock which requires demolition for conversion into plane surface for use by plant in any purpose. The company after taking permission from the Mining department, appoint contractor for braking and shifting the stones after conversion by using it’s machine, labour etc, and for that the contractor issue invoice as “rock breaking charges” to company.
The company also pay GST on royalty paid to Government under the RCM basis.
The final product i.e stone is used by the company for internal road and boundary wall etc… within the pant.
A manufacturing company acquires land nearby it’s existing boundary for expansion of plant. The major part of the acquired land is having high land with big rock which requires demolition for conversion into plane surface for use by plant in any purpose. The company after taking permission from the Mining department, appoint contractor for braking and shifting the stones after conversion by using it’s machine, labour etc, and for that the contractor issue invoice as “rock breaking charges” to company.
The company also pay GST on royalty paid to Government under the RCM basis.
The final product i.e stone is used by the company for internal road and boundary wall etc… within the pant.
Whether the ITC is allowable on GST paid to contractors for rock braking charges?
GST paid on royalty on removal of such stones is allowable as ITC under GST Act,2017?
Whether the service of rock breaking charges will hit under the blocked credit u/s 17(5) (c ) & (d) of the CGST Act,2017 as works contract service or construction Service.
What will be the correct classification of such service.
