Immovable property treatment for a warehouse under construction blocks input tax credit on construction supplies.

A warehouse under construction built with pre-fabricated components fixed to a civil structure and a floor embedded in the earth was treated as immovable property because its annexation, intended permanent use, and inability to be dismantled and relocated without substantial damage showed it formed an integral part of the land. The prefabricated components were regarded as building materials rather than detachable movable parts. On that basis, input tax credit on inward supplies used for construction was blocked and not admissible under the GST credit restriction for immovable property.

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Issues: Whether the warehouse under construction, consisting of pre-fabricated components fixed on a civil structure and floor embedded in the earth, is immovable property, and whether input tax credit is blocked on the inward supplies used for its construction.

Analysis: The term "immovable property" is not defined in the GST Act, so the ordinary meaning, together with allied statutory concepts, was applied. The decisive factors were the nature of annexation, the intention behind the construction, and whether the structure could be dismantled and reused without substantial damage. The warehouse was found to be intended for long-term and permanent beneficial enjoyment of the land, not merely temporary use. The pre-fabricated components were treated only as building materials or structural elements, while the civil work and floor formed an integral part of the warehouse itself. Since the warehouse could not be conceived or relocated without affecting the embedded civil structure and floor, it was not treated as a movable assembly of detachable parts.

Conclusion: The warehouse is immovable property, and input tax credit on the inward supplies used for its construction is not admissible because the credit is blocked under section 17(5)(d) of the GST Act.

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