TMI Blog2020 (9) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... d with skill and labour at the site, it becomes a permanent fixture of the building. Once it has been established that the lift, after its erection, installation and commissioning, would be considered as part of the building, and hence immovable property, the Appellant cannot claim ITC on the input services in terms of the provisions laid out under section 17(5)(d) of the CGST Act, 2017. The provision of Section 17 of CGST Act, says that ITC would be available on tax paid on works contract services when such services are an input service for further supply of works contract service. The appellant does not fulfill the conditions laid down above. It has to be understood that the exception carved out to provide ITC in the case of tax paid on works contract is for those who in turn provide works contract service. For eg when a principal gets a contract of work executed from a sub-contractor and provides the same to the employer. In such a case, the principal becomes eligible for ITC even though the contract results in immoveable property. However, the situation is far from it in the present case. Firstly, the society itself is not a works contract service provider. Nor is it in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Las Palmas Co-op. Housing Society, 20, Little Gibbs Road, Malabar Hill, Mumbai - 400006 ( hereinafter referred to as the Appellant ) against the Advance Ruling No. GST-ARA-31/2019-20/B-13, dated 22.01.2020 = 2020 (2) TMI 497 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA , pronounced by the Maharashtra Authority for Advance Ruling (MAAR). BRIEF FACTS OF THE CASE 3.1 M/s. Las Palmas Co-operative Housing Society Limited situated at 20, Little Gibbs Road, Malabar Hill, Mumbai - 400006 is a Co-operative Housing Society registered under the Maharashtra Co-operative Housing Society Act vide Registration BOM/HSG--446 of 1963 dated 06th July, 1963. 3.2 The Appellant is recovering amount, from each of the society members under various heads such as Service Charges, Electricity Charges, Lift Charges, Ground Rent, Sinking Fund, Repair Fund, Water Charges, Parking Charges, etc., and paying 18% GST on it after availing the input tax credit under the GST Registration No. 27AAABL0207A1ZG. 3.3 The Appellant is under the process of replacing existing lift of the society for which Contract has been awarded to M/s. Fujitec India Private Limited ( hereinafter referred to as Fujite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as immovable property. The Authority have relied upon the Hon'ble Supreme Court Judgment in the case of Triveni Engineering Industries Ltd. vs. C.C.E., 2000 (40) RLT (120) E.L.T. 273 = 2000 (8) TMI 86 - SUPREME COURT , to arrive at the aforesaid conclusion. Once, it has been held by the Advance Ruling Authority that the erection, commissioning and installation of the lifts under question is immovable property, they went on to decide that the input credit in respect of the charges paid to the lift contractor were not admissible to the Appellant in terms of section 17(5)(d) of the CGST Act, 2017, which is being reproduced herein under: (d) goods or services or both received by a taxable person for construction of an immovable property ( other than plant or machinery ) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation- For the purposes of this Chapter and Chapter VI, the expression plant and machinery means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of the CGST Act, 2017. Therefore, they are eligible to take the ITC paid on the input services, received from the Lift contractor. Section 17. Apportionment of credit and blocked credits (1). . . . . . . . . . . . (2). . . . . . . . ... (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: - . (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services or both are used in the course or furtherance of business; Explanation- For the purposes of this Chapter and Chapter VI, the expression plant and machinery means apparatus, equipment, and machinery fixed to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the Appellant made the oral and additional written submissions. 7.1 During the course of the said personal hearing, Shri Monarch Bhatt, Advocate, on behalf of the Appellant contended that the issue pertains to the availment of ITC in respect of the works contract services received from the lift contractor. He further contended that the Appellant is eligible to avail the said ITC, as the lifts are not immovable property, and even if the lift is to be considered as immovable property, they are eligible to claim the ITC in accordance with the provisions of the Circular No. 109/ 28/ 2019-GST, dated 22.07.2019, issued by the CBIC, which provides that e society is eligible to avail the ITC of GST paid by them on certain capital goods such as generators, water pumps, lawn furniture, etc. He therefore contended that the appellant is eligible to avail the ITC in respect of the lift installation charges paid to the lift contractor. He further contended that they were covered by the exception clause of section 17(5)(c) of the CGST Act, 2017, as they are providing works contract services to the members of the society, without altering the works contract services, being received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Explanation - For the purposes of this Chapter and Chapter VI, the expression plant and machinery means apparatus, equipment, and machinery fixed to 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. 12. The above definition of the Plant and Machinery categorically excludes building or any other civil structure. Since, the lifts/elevators, erected, installed and commissioned in the buildings, are construed as an integral part of those building as held by the Advance Ruling Authority on the basis of the Hon'ble Apex court judgment mentioned in the impugned Advance Ruling, hence, the same would be excluded from the category of Plant and Machinery , in terms of the provisions related to the 'Plant and Machinery laid out herein above. Further, the Larger Bench of the Supreme Court in the case of Kone Elevators vs State of Tamil Nadu Al (Writ petition (C) NO. 232 OF 2005, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the following, namely: - (c) Works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; In view of the above provision, the Appellant have submitted that if works contract services have been availed for providing works contract services, credit is available to them. 14. The aforesaid provision says that ITC would be available on tax paid on works contract services when such services are an input service for further supply of works contract service. The appellant does not fulfill the conditions laid down above. It has to be understood that the exception carved out to provide ITC in the case of tax paid on works contract is for those who in turn provide works contract service. For eg when a principal gets a contract of work executed from a sub-contractor and provides the same to the employer. In such a case, the principal becomes eligible for ITC even though the contract results in immoveable property. However, the situation is far from it in the present case. Firstly, the society itself is not a works contract service provid ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
