TMI Blog2019 (10) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... n question is given on rent for enjoyment of the tenant and the additional charges are charged for the maintenance - The applicant has installed Chillers, Air Handling Units, Lift, Escalator, Travellator, Water Treatment Plant, Sewage Treatment Plant, HSD Yard, Mechanical Car Park, Surveillance System, DG Sets, Transformers, Electrical Wiring and fixtures and PHE, Firefighting and water management pump system and other facilities of the building. The applicant has procured the goods and services for installation of these. The applicant has stated that he has procured goods or services or both for the purposes of additions to the said immovable property and has capitalized them in his books of accounts. Therefore, the same are covered under the expression construction of an immovable property and hence the input tax credit on the goods or services or both received by a taxable person in respect of such construction is not available - The claim of the applicant that the immovable property is a plant and hence the covered under the exception in Section 17(5)( d) is verified and it boils to the issue whether the listed items are covered under the definition of plant . The defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stallations , are regarded as blocked credits under Section 17(5) of the CGST Act, 2017? (a) Chillers, (b) Air Handling Unit (AHU), (c) Lift, Escalators and Travellator, (d) Water Treatment Plant (WTP). (e) Sewage Treatment Plant (STP), (f) High Speed Diesel Yard (HSD), (g) Mechanical Car Park (MLCP), (h) Indoor / Outdoor Surveillance System (CCTV), (i) D.G.Sets, (j) Transformers, (k) Electrical wiring and fixtures (l) Public Health Engineering (PHE), Fire-fighting and water management pump system. 3. The applicant furnishes some facts relevant to the stated activity: a. The Applicant is developing a shopping Mail- Mantri Arena Mall (Schedule Property) which will include a hypermarket, multiplex cinema theatre complex, departmental stores, retail shops and food courts. b. The Applicant is entering into various lease agreements with their customers / tenants (Service recipients) and will be leasing all unit(s) at the Mall together with the right to use the staircases, common areas and other common facilities. c. To undertake development of the said property, the Applicant was and is required to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etrieving cars that typically use a system of pallets and lifts and signalling devices for retrieval of cars. viii. Indoor/Outdoor Surveillance System (CCTV) - A CCTV system is a TV system in which signals are not publicly distributed but are monitored, primarily for surveillance and security purposes within the building. ix. DG Sets - These generate required power that is required for all electro-mechanical equipment in the building. x. Transformers - These equipment bring down the voltage of the power supplied by BESCOM, as per stipulated norms. xi. Electrical wiring and fixtures - These fixture, through cables wires, carry power to various electro-mechanical equipment and are related to lighting and associated accessories. xii. Public Health Engineering (PHE), Fire-fighting and water-management pump system - This is essential for life safety of the building which includes Fire protection and election, and water apply management for the building. e. All the said installations are used, directly or indirectly, for making outward supply of services (i.e. lease rentals.) 4. The applicant submits his understanding on the questions before this Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y tools. It means more than a solid structure built upon the ground, whose parts either do not move at all or if they do move, do not move the one with or upon the other in interdependent action with the object of producing specific and definite result. 2. Definition under Sales Tax laws: a. In the case of Rashmi Enterprises vs. State of Gujarat (91 STC 295) (Guj) = 1993 (2) TMI 284 - GUJARAT HIGH COURT , it has been held that the term machinery is nowhere defined in the Act. The earliest judicial attempt to define the term machinery was made by the Privy Council in Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Municipality AIR 1922 PC 27 = 1921 (7) TMI 1 - BEFORE THE PRIVY COUNCIL . The Privy Council, held that machinery must mean something more than a solid structure built upon the ground, whose parts either do not move at all, or if they do move, do not move the one with or upon the other in interdependent action with the object of producing a specific and definite result. Their Lordships were of the view that there was great danger in attempting to give a definition of the word machinery which would be applicable in all cases and it may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with others when they move interdependently by application of force-mechanical or manual-with an avowed object to produce a given product. In other words, in order to be a machinery, the following four factors must exist, namely: (1) a complete and integrated collection of several objects or articles; (2) these objects or articles should interact in unison upon or with each other; (3) this interaction is prompted by application of force which may be manual or motive power; and (4) the movement should be with a view to do some specific activity or to obtain specific or definite result . d. In this case of Dani vs. State of Karnataka (44 STC 276) = 1979 (7) TMI 215 - KARNATAKA HIGH COURT , the Karnataka High Court was concerned with a question whether a tractor-trailer is a machinery or accessory of a machinery. The High Court summarized the criteria laid down by the Privy Council in the following words. (i) The would machinery must mean something more than a collection of ordinary tools. It must mean something more than a solid structure built upon the ground whose parts either do not move at all or, if they do move, do not move the one wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would like to draw attention to certain judicial pronouncements where it has been held that CENVAT Credit of inputs/ input services used for construction is admissible. Although these judgments have been pronounced under the erstwhile CENVAT Credit laws, the analogy can be adopted to understand the eligibility of the same under the GST laws. a. M/s. Rattha Holding Co. Pvt. Ltd. Vs Commissioner of Central Services Tax, Chennai (2018 (9) TMI 1722) - wherein the Hon ble Chennai Tribunal held that disallowance of credit of input service used for Construction of buildings is unjustified. b. Commissioner of Central Excise, Vishakhapatnam-II vs M/s. Sai Samhmita Storages (p) Ltd. (2011 (2) TMI 400) - wherein the Hon ble Andhra Pradesh High Court held that the assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided and the finding of the original authority as well as the appellate authority are clearly erroneous. c. Commissioner of Central Excise, Salem vs. Ashok Agencies (2016 (5) TMI 782) - wherein the Hon ble Chennai Tribunal held that Commissioner (Appeals) has not committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant and relevant facts. At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 5.1 The transaction of the applicant is examined and found that the applicant is developing a Shopping Mall and is entering into various lease agreements with customers or tenants. 5.2 The sample copy of the lease agreement entered by the applicant with the tenants shows the following: (a) What is leased is the property together with the right to use the stair cases, common areas and other common facilities. (b) The applicant is charging rent and the common area maintenance charges from each of the tenant. (c) The HVAC charges are also collected separately from each of the tenant. From the above, it is seen that the property in question is given on rent for enjoyment of the tenant and the additional charges are charged for the maintenance. 5.3 The applicant has installed Chillers, Air Handling Units, Lift, Escala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purposes of this Chapter and Chapter VI, the expression plant and machinery means apparatus, equipment, and machinery fixed to the earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes - (i) Land, building or any other civil structures (ii) Telecommunication towers; and (iii) Pipelines laid outside the factory premises. 5.8 This definition is in the context of plant and machinery and includes apparatus, equipment and machinery and contextually, the word plant could include apparatus and equipments fixed to the earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports, whereas machinery would be covered separately. The exclusion clause relating to land, building and any other civil structure would be applicable to this plant and hence input tax credit is not available as it is a civil structure. 5.9 The case laws relied by the applicant are all related to the definition of machinery and that has no relevance in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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