Blocked input tax credit for leasehold land and manufacturing facility construction where the plant was treated as immovable property.

Services acquired to secure leasehold land and establish a manufacturing facility were treated as part of construction of immovable property, so input tax credit was denied under the blocked-credit rule. The authority also held that an air separation plant erected with foundation and structural supports on leased land for long-term industrial use was not a temporary movable chattel. Even if characterised as plant and machinery, the statutory exclusion of land from that expression supported denial of credit for services relatable to land used for construction.

---

---

Issues: Whether input tax credit was blocked under section 17(5)(d) on services received for transfer of leasehold rights and whether the air separation plant qualified as immovable property rather than a movable plant and machinery.

Analysis: The authority held that the leasehold-rights arrangement enabled the applicant to obtain and use the land for setting up the manufacturing facility and that the related expenditure formed part of the cost of the project. It treated the setting up, installation and commissioning of the facility as construction within the inclusive meaning of the provision. It further held that the plant was erected with foundation and structural supports on leased land for a long-term manufacturing purpose, so it was not a temporary movable chattel. Even if the facility could be described as plant and machinery, the statutory exclusion of land from that expression supported denial of credit for services relatable to land acquired for construction.

Conclusion: The restriction under section 17(5)(d) applied and the input tax credit was not admissible.

Final Conclusion: The appeal failed and the ruling of the lower authority denying input tax credit was sustained.

Ratio Decidendi: Services procured to secure land for setting up and capitalising a manufacturing facility constitute services received for construction of an immovable property, and credit is barred where the facility is not shown to escape the statutory exclusion.

---