9911796707
TMI Blog2021 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 11 of the GST Acts only in respect of grant of lease by State Government Industrial Development Corporations or Government entities. The transferee from GIDC herein named as M/s Ginni Filaments intends to charge GST and pay tax under the GST Acts on lease premium to be collected from JM for assignment of lease. 3. The applicant submit that they are eligible to input tax credit of tax paid on assignment of lease in terms of the provisions of Section 16 (1) of CGST Act if the leasehold land is used for business purpose and that the provisions of section 16(2) of the CGST Acts are fulfilled. 4. The applicant submits that Section 17 (5) (d) of CGST Act specify circumstance under which ITC is blocked and this clause is not applicable to the facts of the applicant. Section 17(5) (d) of the GST Acts reads as follows: 17(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (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 or machinery) on his own account including when suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITC. 11. We refer to Section 16(1) CGST Act, reproduced as follows: Section 16(1) 16. Eligibility and conditions for taking input tax credit.- (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. 11.1 Further we refer to the Non Obstante Section 17(5) CGST Act, which starts with the phrase 'Notwithstanding anything contained in section 16(1)..', i.e, provisions of section 17(5) overrides the provisions of section 16(1). Section 17(5)(d) CGST Act, is reproduced as follows: (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 or machinery) on his own account including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as stated as follows: "The word 'or' is normally disjunctive and 'and' is normally conjunctive but at times they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context. As stated by Scrutton L.J. "You do sometimes read 'or' as 'and' in a statute. But you do not do it unless you are obliged because 'or' does not generally mean 'and' and 'and' does not generally mean 'or'. Further, as pointed out by Lord Halsbury, the reading of 'or' as 'and' is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done". Where provision is clear and unambiguous the word 'or' cannot be read as 'and' by applying the principle of reading down. But if the literal reading of the words produces an unintelligible or absurd result 'and' may be read for 'or' and 'or' for 'and' even though the result of so modifying the words is less favourable to the subject provided that the intention of the Legislature is otherwise quite clear. Conversely if reading of 'and' and 'or' produces grammatical distortion and makes no sense of the portion following 'and', 'or' cannot be read in place of 'and'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that subject GST borne by JM is blocked credit under Section 17(5)(d) CGST Act for the land leased to it will be for the construction of Factory shed, administrative block, et al. Thus the plain meaning of the words of Section 17(5)(d) itself, blocks the subject amount from credit admissibility. Further, We rest on the dictum, 'first things first', that is to say, the land will be used for construction of the immovable property/ factory shed/ administrative block/ civil structures first. Further, we note that the explanation to said section 17(5) defines 'plant & machinery' as, 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. 14. We note that this issue was raised in the 37th GST Council held on 20-9-21, wherein H'ble Punjab Finance Minister vide letter dated 25-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready been given to GIFT city." 15. We find that GST Council is cognizant of this position of law that tax credit of GST on leasing of land is not available for construction of immovable property. Here we find it apt to reproduce the wordings of H'ble Delhi High Court, in the case of Manufacturers Traders Association vs UOI-2020 (43) G.S.T.L. 616 (Del.), at para 10: 'GST Council - Status of - This is a Constitutional body brought into existence by 101st Amendment and is chaired by the Union Minister for Finance with Finance Minister of all States as members - Rates of GST are jointly decided and recommendations made to Central and State Governments - It is highest deliberative forum to resolve issues arising out of the implementation of the GST and the Council embodies the spirit of Co-operative Federalism'. The H'ble Court further ruled that it cannot sit in appeal and postulate that the decision of the Council is not what they have unwaveringly held it to be. 16. In conspectus of aforementioned discussion and findings, We pass the Ruling based on the following four grounds: i. The expression 'plant and machinery' excludes land. As expounded at para 12 of this Ruling, with ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
