Immovable property test bars GST credit for rotary parking system installed on a permanent foundation.

A rotary parking system proposed on a fixed foundation with structural support was treated as immovable property because it was intended for permanent beneficial enjoyment of the premises and could not be shifted without dismantling and re-erection. On that basis, the Authority held that it was a civil structure and did not qualify as plant and machinery. As a result, input tax credit on the supply and installation of the system was barred under the GST blocked-credit rule for construction of immovable property on own account, and the plant-and-machinery exception did not apply.

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Issues: (i) Whether the rotary parking system proposed to be installed by the applicant is an immovable property and a civil structure, or whether it qualifies as plant and machinery; (ii) whether input tax credit on the supply and installation of the rotary parking system is barred under section 17(5)(d) of the GST law.

Issue (i): Whether the rotary parking system proposed to be installed by the applicant is an immovable property and a civil structure, or whether it qualifies as plant and machinery?

Analysis: The system was to be erected on a specific foundation with structural support, and the materials and quotation showed that installation involved supply of constituent parts, civil foundation work, erection, fixing of equipment and commissioning. The decisive test applied was whether the chattel could be moved in the same position or only after dismantling and re-erection. Since the system could not be shifted as such and had to be dismantled before relocation, it was treated as attached to earth and intended for permanent beneficial enjoyment of the premises. The Authority also held that the system did not fall within plant and machinery, but was in the nature of a civil structure forming part of the immovable property.

Conclusion: The rotary parking system is immovable property and does not qualify as plant and machinery.

Issue (ii): Whether input tax credit on the supply and installation of the rotary parking system is barred under section 17(5)(d) of the GST law?

Analysis: Once the rotary parking system was held to be an immovable property and not plant and machinery, the inward supply for its construction and commissioning fell within the blocked-credit provision for goods or services received for construction of immovable property on own account. The explanation to section 17 was read as permitting credit for plant and machinery and its foundation or structural support, but excluding land, building and other civil structures. On that basis, the Authority concluded that the rotary parking system was not covered by the plant-and-machinery exception and that the credit was hit by the statutory bar.

Conclusion: Input tax credit on the rotary parking system is not admissible under section 17(5)(d).

Final Conclusion: The ruling settles that the proposed rotary parking installation is to be treated as an immovable civil structure, and the GST paid on its supply and installation is not available as credit.

Ratio Decidendi: Where a parking installation is erected on a foundation for permanent beneficial enjoyment of the premises and cannot be relocated without dismantling, it is immovable property and the credit bar for construction of immovable property applies, unless the item clearly falls within plant and machinery.

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