9911796707
TMI Blog2025 (5) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... 47,125/-); * that they have made the payment for the said supply except 5% of the contract value as per payment terms; * that the installation of a 10 Ton Crane in the PEB was as per the specifications mentioned in the layout drawing provided by M/s. Konecranes and Demag Private Limited; * that the load of the crane is borne by the PEB; * that it is not possible to install the crane independently without the support of the PEB; * that they have enclosed the Chartered Engineer's certificate dated 28/08/2023 along with the load calculations and crane loads with the application. 4. The applicant further stated that the PEB is a special kind of multi utility building; that it is not merely a conventional roofed factory building meant to protect the men, materials and machineries from the weather but is a plant and machinery in itself as it is incrementally strong with large foundation, pillars and beams with support mountings across the length and breadth; that it facilitates the operation of overhead crane(s) which makes the entire PEB a plant and machinery in itself; that the overhead crane is installed with the support of the foundation of the PEB structure and that the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the crane. 10. Before dwelling on to the question on which the applicant has sought ruling, it would be prudent to reproduce the relevant sections, for ease of understanding viz * Section 2. Definitions.- In this Act, unless the context otherwise requires,- (59) "input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business; (60) "input service" means any service used or intended to be used by a supplier in the course or furtherance of business; * Section 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. * Section 17. Apportionment of credit and blocked credits (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or mounting across the pre-cast concrete beams, poles over which crane would be operated. 13. At the cost of repetition, the applicant has received works contract service from M/s. Shree Steel Building Technology, Ahmedabad, regarding installation and erection services of PEB, valued at Rs. 1.11 crores. Works contract, is defined under section 2 (119) of the CGST Act, 2017 as a contract AUT for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. As per the copy of the invoice attached with the application papers, the service received by the applicant is classified under SAC 995441 involving GST of Rs. 16,94,250/ -. Now, SAC 99544 is in respect of 'assembly & erection of prefabricated constructions', while SAC 995441 is in respect of 'installation, assembly and erection services of prefabricated buildings'. It is in this context that we are required to examine the averments made by the applicant. 14. What needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on cannot said to be on a taxable person's "own account" if it is intended to be sold or given on lease or license. 33. Section 17 (5) incorporates an explanation which provides that the word "construction" used in clauses (c) and (d) includes reconstruction, renovation, additions, alterations or repairs, to the extent of capitalisation, to the immovable property. Thus, a very wide meaning has been assigned to the expression "construction" by the said explanation. 34. There is hardly a similarity between clauses (c) and (d) of Section 17 (5) except for the fact that both clauses apply as an exception to sub-section (1) of Section 16. Perhaps the only other similarity is that both apply to the construction of an immovable property. Clause (c) uses the expression "plant and machinery", which is specifically defined in the explanation. Clause (d) uses an expression of "plant or machinery", which is not specifically defined. 35. Now, what is material is the explanation to Section 17, which reads thus: "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 stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 17 (5), ibid, land, building or any other civil structures have been excluded from the definition of plant and machinery. 17. Further, while analyzing section 17 (5) (d), ibid, the Hon'ble Supreme Court has concluded that it seeks to exclude from the ambit of sub- sections 16(1) & 18(1), ibid, services received by a taxable person to construct an immovable property on his own account subject however, to two exceptions, where goods or services or both are received by a taxable person to [a] construct an immovable property consisting of a "plant or machinery"; and [b] for the construction of an immovable property made not on his own account; The Hon'ble Supreme Court further, explains that construction is said to be on a taxable person's "own account" when [i] it is made for his personal use and not for service; or [b] it is to be used by the person constructing as a setting in which business is carried out further stating that construction cannot be said to be on a taxable person's "own account" if it is intended to be sold or given on lease or license. In view of the foregoing, looking to the facts of the case, the wordings of section 17 (5) (c) and (d) ibid, and its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to overhead crane alone subject to fulfillment of conditions stipulated in section 17 (5) (c) and (d) of the CGST Act, 2017 and explanation thereunder. However, they are not eligible for input tax credit relating to construction of other civil structure like side walls, roof of the Integrated factory building. However, with due respect, we find that the reliance to the aforementioned order is not applicable in the present case since the above order has been issued before the judgement of the Hon'ble Supreme Court in the case of M/s. Safari Retreats P Ltd., ibid. 20. In view of above, we rule as under: RULING No proportionate Input Tax Credit is admissible for supply of the following goods and services: a) Steel, Cement and other consumables etc., to the extent of their actual usage in the execution of works contract service when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory Building with Gantry Beam, which in turn is used for mounting across the pre-cast concrete beams, poles over which the crane would be operated; b) Installation and Erection Services of the PEB when supplied for construction of immovable proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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