TaxTMI 
TaxTMI 
2019 (6) TMI 761
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....the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGS T Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE OUESTION(S) ON WHICH ADVANCE RULING IS REOUIRED. 1. M/s. Western Concessions Private Limited (formerly known as H-Energy Gateway Private Limited (hereinafter referred to as "the applicant") having its corporate head office at 12th Floor, Knowledge Park, Hiranandani Business Park, Powai, Mumbai, is, inter-alia, engaged in regasification of Liquified Natural Gas and delivering the same to customers. 2. The applicant has obtained registration and holding valid registration certificate issued under Central Goods and Services Tax Act, 2017 ("CGST Act"). 3. The applicant is setting up a Liquified Natural Gas (LNG) re-gasification pr....
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....be credited to the electronic credit ledger of such person." ......emphasis supplied 12. Further, Section 17(5) of the CGST Act provides that in certain cases, input tax credit will not be available even if the goods or services are used in the course or furtherance of business. The relevant portion of section 17(5) is extracted as under: "(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: - (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation.- For the purposes of this Chapter and Chapter VI, the expression "plant and machinery" means apparatus, equipment, and machinery fixed to earth by foundation or structural sup....
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.... furtherance of his business. C.2 Section 17(5) of the CGST Act provides that in certain cases, input tax credit will not be available even if the goods or services are used in the course or furtherance of business. C.3 Clause (c) of section 17(5) restricts availability of ITC in respect of works contract service used for construction of immovable property, except in case where it is an input service for further supply of works contract service. Clause (d) of Section 17(5) bars ITC in respect of goods or service used for construction of immovable property on assessee's own account. C.4 However, the above restriction on availment of input tax credit will not apply if the immovable property constructed is plant and machinery. The term "plant and machinery" is defined in the explanation to section 17 as apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply but, inter alia, excludes pipelines laid outside the factory premises. C.5 In the present case, the applicant is constructing a Tie-in pipeline to deliver the re-gasified LNG to the cross-country pipeline/National Grid for further transportation to ....
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....of mechanics for utilizing, modifying, applying, or transmitting energy, whether simple, as a lever and fulcrum, pulley, etc. or complex, as a Fourdrinier papermaking apparatus. Black's Law Dictionary 'Equipment' - The articles or implements used for a specific purpose or activity 'Machine' - A devise or apparatus consisting of fixed or moving parts that works together to perform some function. - Also termed apparatus. D.2 Therefore, any instrument which is understood to be an apparatus, equipment or machine in common parlance and is permanently fixed to the earth by foundation and structural support which is used for making outward supply will be treated as "plant and machinery". D.3 The term equipment is defined in the dictionaries as a thing which is used for particular or special purpose. In the present case, the Tie-in pipeline is used for delivery of natural gas from the terminal to the cross-country pipeline. Thus, the pipeline is used for the specific purpose of delivery. Further, as stated above, the delivery of gas up to the cross-country pipeline is an integral and essential part of the services provided by the applicant. D.4 Thus, the....
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....ucted over a plot of land. E.7 The Hon'ble Kerela High Court in the case of V. Kalpakam Amma v. Muthurama lyer Muthurkrishna, AIR 1995 Ker 99 = 1994 (7) TMI 370 - KERALA HIGH COURT, observed the meaning of the term "building" in its ordinary and natural sense as under: "The first question to be decided is what is a building? The ordinary or natural meaning to be assigned to the word 'building' is given in P. Ramanatha Aiyar's Law Lexicon (Reprint Edition 1987) at page 159, thus: "A thing composed of the fabric of the building and the ground that the fabric rests upon and encloses". It is further stated by the author that "the land upon which the walls of a stone or brick building rest, or, indeed, of any other kind of building which in law is considered as annexed to the soil, and which is not clearly severed therefrom by the terms of the deed itself, must be considered as part of the building itself. In Stroud's Judicial Dictionary (Vol. I. 5th Edn.), the word 'building' is defined thus: "What is a building must always be a question of degree and circumstances". In Black's Law Dictionary (5th Edn.), the meaning of ....
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....pipeline. 3. The applicants further wish to make the following submissions in addition to the submission already made in Annexure-B. of the application made in FORM ARA-01, SUBMISSIONS The exclusion clause of Explanation to Section 17(5) of the Central Goods and Services Tax Act, 2017 presupposes that there should be a factory premises, and in order to be excluded from the definition of plant and machinery. the pipeline should be laid outside such factory premises. The wordings used in the Explan be read as it is and it cannot imply anything which is not expressly stated. A.1 Section 17(5) of the Central Goods and Services Tax Act, 2017 ("CGST Act"), inter alia, restricts the availability of ITC of GST paid on goods and services used for construction of immovable property. The relevant portion of the Section 17(5) is extracted as under: "(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: (c) works contract services when supplied for construction of an immovable property (Other than plant and machinery) except where it is ....
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....ok squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed it Cannot imply anything which is not expressed it cannot import provisions in the statutes so as to supply any assumed deficiency." A.5 Similar view was given in the decision of Supreme Court in case of A.V. Fernandez v. State of Kerala reported at AIR 1957 SC 657 = 1957 (4) TMI 46 - SUPREME COURT. The relevant portion of the said judgment is extracted as under- "....It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter..." A.6 Thus, the applicants submit that t....
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....ess; (iv) Black's Law Dictionary, V Edition Premises. In estate and property. Land and tenements; an estate, including land and buildings thereon; the subject-matter of the conveyance. F.F. Proctor Troy Properties Co. v. Dugan Store, 191 App.Div.685, 181 NYS 786. The area of land surrounding a house, and actually or by legal construction forming one inclosure witli it. A distinct and definite locality and may mean a room, especially building or other definite area, or a distinct portion of real estate. Land and its appurtenances. (v) Cambridge International Dictionary of English (in PI) the land and building owned by someone, esp. by a company or organization. (vi) The American Heritage Dictionary of English Language, III Edition 4. premises. a. Land and the building on it. b. A building or a part of building on it. (vii) Wharton's Law Lexicon. 1976 Reprint Ed premises' is often used as meaning 'land or houses'. (viii) Cochran's Law Lexicon, IV Edition 'Premises' means 'houses or lands'. (ix) Earl Jowitt, Dictionary of English Law Premises...from th....
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....e. 'Apparatus' means something which is inclusive of some other appliance. 'Apparatus' are the implements used in an operation or activity. 'Equipment' is an act of equipping or fitting, or the state of being equipped; to supply with whatever is necessary to efficient action in the way. 'Equipment' is a thing which is used for a particular purpose. Webster Comprehensive Dictionary 'Apparatus' - A complex devise or machine for a particular purpose: an X-ray apparatus. 'Apparatus' - An integrated assembly of tools, appliances, instrument, etc. operating to achieve a specified result. 'Equipment' - Whatever constitute an outfit for special purpose 'Machine' - Any combination of mechanics for utilizing, modifying, applying, or transmitting energy, whether simple, as a lever and fulcrum, pulley, etc. or complex, as a Fourdrinier papermaking apparatus. Black's Law Dictionary 'Equipment' - The articles or implements used for a specific purpose or activity 'Machine' - A devise or apparatus consisting of fixed or moving parts that works together to perform some function. - Also termed appar....
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....rs acquisition remotely. xi. Power Generation Systems (Diesel Generators & Solar Panels) -These are installed at Terminals and SV Stations for generation Of secondary power or back up power. xii. Filtering- This equipment is located at the start point and end point of the pipeline for filtration of Gas thereby separating any debris or solid contamination. xiii Gas Detention/ Leak Detection system - The Gas and leak detection systems are used to identify whether any leak has occurred in any part of the pipeline network. xiv. OFC cables - These are laid down alongside the pipeline for collection and transfer of data relating to the tie-in pipeline. xv. Gauges & Transmitters - These instruments are installed in pipeline for measuring and transmitting parameters like pressure and temperature of gas. xvi. Cathodic Protection System - This system is installed in pipeline for controlling the corrosion of pipeline. B.5 The aforesaid equipment and machineries allow the applicant to induct, control, manage and monitor the flow of gas in the tie-in pipeline and such equipment together comprise the tie-in pipeline, which acts a machinery....
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....e or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject." ....emphasis supplied C.4 Thus, in view of the aforesaid judgment, it is incorrect to adopt the meaning of 'factory' given in the Factories Act 1948 to interpret the term "factory premises" used in Explanation to Section 17(5) of the CGST Act. C.5 Further, even Section 2(m) of the Factories Act, 1948 defined 'factory' as any "premises" where manufacturing activity is undertaken. As already stated in the submissions made in the preceding paragraph 'premises' can only mean either land or buildings comprising a factory. Hence, even if the definition given in Factories Act, 1948 is relied upon, the FSRU which is vessel would not qualify as a factory. 03. CONTENTION - AS PER THE CONCERNE....
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....be considered as an 'apparatus' to be included in the expression "plant and machinery". The answers to these questions will decide whether they are eligible to avail ITC of GST. The eligibility for taking input tax credit ('ITC') is dealt in the Sections 16 and 17 of the CGST Act. Section 16 states that a registered person shall be entitled to take ITC on goods and services used or intended used in the course or furtherance of his business and Section 17(5) of the CGST Act provides that in certain cases, input tax credit will not be available even if the goods or services are used in the course or furtherance of business. The relevant portion of Section 17(5) is extracted as under: "(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: (c) works contract services when supplied for construction of an immovable property (Other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable pro....
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.... passed by the legislature can always be relied upon. Accordingly we are of the considered view that Section 2(m) of The Factories Act, 1948 which defines the term 'factory' should be considered which is reproduced as under:- "2. (m) "factory" means any premises including the precincts thereof- (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) Whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is. ordinarily so carried on; but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952)] or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place." It is clear from the above definition that a factory means any premises having workers who are involved in a manufacturing process. In the subject case the FSRU is a place where there....
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.... relevant to mention here that there are some dictionaries which define 'factory ship' which are given below: The freedictionary.com : "An ocean vessel equipped to process fish or other marine food" Merriam-Webster dictionary: "a ship equipped to process a whale or fish catch at sea" Therefore, it is clear that there are some ships which are categorized as factories in the commercial world and hence it is incorrect to argue that FRSU is not a factory by relying on selective dictionary meanings. The second contention of the applicant is that the pipeline would be otherwise covered under 'apparatus', 'equipment', or 'machinery' since it is fitted with Valves, metering system, pressure regulating system, bends, fittings, flanges, gas leak detection system, gauges, transmitters etc. and hence qualify as 'plant and machinery' under explanation to Section 17(5). We are also not in favour of this contention because every pipeline is fitted with these equipments and the pipeline in question is no exception. To call it an 'apparatus', 'equipment', or 'machinery' would be a distortion of the meaning when the applicant himself has described it as a 'pipeline'. When a specific desc....