Input tax credit denied for prefabricated shed treated as immovable property under GST construction restrictions.

Prefabricated shed construction on an RCC platform was treated as immovable property because the components, foundation, and civil work formed an integrated structure attached to the earth for permanent business use. Applying the General Clauses Act and the Transfer of Property Act, the Authority concluded that the shed had no separate movable character. On that basis, input tax credit was found inadmissible under the GST restriction on credit for construction of immovable property, including works contract services and goods or services used on own account under section 17(5)(c) and section 17(5)(d).

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Issues: Whether input tax credit is admissible on construction of a shed using pre-fabricated technology, and whether the shed qualifies as movable property or immovable property for the purpose of section 17(5) of the GST law.

Analysis: The prefabricated shed was proposed to be erected on an RCC platform and used as a permanent business structure. The determination turned on whether the structure was attached to the earth or permanently fastened to what is attached to the earth, and whether the attachment was for the permanent beneficial enjoyment of the land. Applying the definitions in the General Clauses Act and the Transfer of Property Act, and the principles drawn from the cited precedents, the prefabricated components, together with the RCC foundation and civil work, were treated as forming an integrated structure with no separate existence as movable property. The Authority also treated the construction activity as falling within the restriction on credit for construction of immovable property, including works contract services and goods or services used on own account.

Conclusion: The shed constructed using pre-fabricated technology was held to be immovable property, and input tax credit was held not admissible under section 17(5)(c) and section 17(5)(d) of the GST law.

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