Rotary parking system treated as immovable property, so GST input tax credit was blocked under the construction bar.

A site-specific rotary parking system installed with specialised foundation and structural support was treated as a permanent civil structure forming part of the rented premises. Applying the statutory definition of plant and machinery, the AAAR held that the installation was not plant or machinery but an immovable property, because it was fixed to earth by foundation and structural support and became operational only after site assembly. The Authority further applied the permanency test and held that the system was an addition to the immovable property used for renting premises. Input tax credit was therefore blocked under Section 17(5)(d), notwithstanding the appellant's business use.

---

---

Issues: Whether the rotary parking system installed at the appellant's premises constituted construction of an immovable property so as to attract the ITC bar under Section 17(5)(d) of the GST law, and whether the system could be treated as plant and machinery outside the blocked-credit provisions.

Analysis: The Authority examined the nature of the rotary parking system, the foundation and structural support required for its installation, the supplier's invoices and quotation, and the appellant's own description of the supply and installation arrangement. It found that the system was not a mere apparatus or equipment, but a composite and site-specific installation involving constituent parts, specialised foundation, and steel framework, which became operational only after assembly at site. Applying the statutory definition of plant and machinery, the Authority held that the expression excludes land, building, and other civil structures, while covering only apparatus, equipment, and machinery fixed to earth by foundation or structural support. On facts, the system was held to be a civil structure and an addition to the immovable property used for renting premises. The Authority also applied the permanency test and concluded that the installation was permanently attached to the earth for the beneficial enjoyment of the rented premises. As the installation amounted to construction of an immovable property, credit was held to be blocked notwithstanding the asserted business use. The delay in the original ruling was noticed, but no substantive relief flowed from that observation.

Conclusion: The rotary parking system was held to be an immovable property and not plant and machinery, so input tax credit on its purchase and installation was held inadmissible under Section 17(5)(d).

Final Conclusion: The appeal failed and the advance ruling denying input tax credit on the rotary parking system was affirmed.

Ratio Decidendi: Where a site-specific parking installation, with specialised foundation and structural support, becomes a permanent civil structure forming part of the rented premises, it is construction of an immovable property and the input tax credit bar under Section 17(5)(d) applies, even if the installation is used in business.

---