TaxTMI 
TaxTMI 
2019 (10) TMI 1391
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....rovide the leasing of logistics facility space services, the Applicant has undertaken as under : a) That the premises is capable of being used as Logistics Facility space/ commercial use under all applicable Laws and that all necessary approval(s) have been obtained from all regulatory/ governmental authorities. b) That full electricity backup would be provided for the premises at all times for which the Applicant shall install a generator with required load capacity. The Applicant shall also be responsible for the upkeep and maintenance of the generator (including the fuel) so that no hindrance is caused to Lessee for the use of the premises. c) That the premises inclusive of service lift and other electrical equipment shall be maintained by the Applicant at its own cost, in good condition including cleaning and housekeeping. That for the purpose of maintenance and use, the Applicant shall deploy sufficient number of manpower at the premises all times so that no hindrance is caused to Lessee while using the premises. d) That the Applicant shall provide to the Lessee the loading and unloading ramps for the vehicles as per standards of Lessee. For storage of two-wheelers in....
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.... order to avoid the cascading effect of various input taxes, Section 16 of the CGST/HGST Act provides that every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49 of the CGST Act as well as Section 49 of the HGST Act, be entitled to take credit of the input tax charged on any supply of goods or services or both made to him, which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. Therefore, in view of Section 16 of the CGST/HGST Act, the Applicant being a registered taxable person, is statutorily entitled to avail the benefit of input tax credit on the supply of goods/capital goods and various services which are consumed or utilized for the construction and leasing out of the aforesaid warehouse and set off the same against the CGST/HGST payable on the rentals received from the lessee of the said warehouse as there is no break in the supply chain of Applicant No.1 and the receipt of rentals and the tax payable thereon are the direct and inexorable consequence of the construction of the cover....
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....ly of services, namely:- (a) **** (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Here the legislature used the phrase "intended for sale" whereby the intention of the builder was made the decisive factor by the legislature. Precisely, the same approach is expected to be adopted in the present case. Otherwise, it would be highly arbitrary and discriminatory application of the provision. Two categories of builders are mentioned in GST Act, one in paragraph 5(b) of Schedule II and the other in Section 17 (5) (d) of the CGST Act/HGST Act. But the case of the Applicant is completely different from the two categories mentioned hereinbefore. The warehouse which the Applicant is constructing is neither "intended for sale" nor on his "own account" but it is "intended for letting out." Therefore, by no stretch of imagination, it can be concluded that the warehouse which is constructed by t....
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....of these items, the assessee could not provide storage and warehousing services and hence, are entitled to credit of Central Excise duty paid on these items. 3. Question on which Advance Ruling is sought: 3.1 Whether Input Tax Credit of GST in respect of inputs/ capital goods used or intended to be used for creation of covered logistics facility space (warehouse) to be rented out for storage purposes be eligible for Input Tax Credit under the provisions of section 16 and 17 of the CGST Act, 2017? 3.2 Whether Input Tax Credit of GST in respect of inputs in form of goods and services be eligible if the goods and services are consumed and used in construction of covered logistic facility space when the said Input Tax Credit would be utilized in order to discharge and pay CGST and HGST/ IGST on rent received from tenants of the warehouse. 4. Discussion: 4.1 The applicant M/s Dhingra Trucking Pvt. Ltd. is a registered taxable person, engaged in the construction of logistic facility. The applicant has entered into an agreement with an auto manufacturer company wherein it has agreed to leasing of logistic space for commercial use. It has also agreed to provide electricity backup, loa....
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.... electronic credit ledger of such person. 4.6 Section 17 (5) (d) of the CGST Act reads 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. 4.7 Schedule II Appended to the CGST Act describes Activities or transactions to be treated as supply of goods or supply of services. Para 5 of this schedule reads: The following shall be treated as supply of services, namely:- (a) ......................... (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. 4.8 There is no doubt regarding the applicant being a supplier of service under Para 5(b) of Schedule II. 4.9 Section 16 entitles a registered person to claim credit of input tax charged on any supply of goods or services to him whereas Section 17 is ....