TaxTMI 
TaxTMI 
2019 (6) TMI 1580
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....various goods and services from various contractors for fitting-out of the warehousing spaces and provides the subject space having with all facilities and infrastructure facility on rent to various industrial consumers and manufacturers. The Applicant discharges applicable GST on such procurements. 1.6 Section16 (1) of Central Goods and Services Tax Act, 2017 ("CGST Act") entitles a registered person to take credit of input tax charged on any supply of goods or services or both which are used or intended to be used in the course or furtherance of business. 1.7 However, as per Section 17 (5) of the CGST Act, a restriction is imposed with respect to input tax credit (hereinafter referred to as "ITC") on procurement of goods and services or both received by the taxable person for construction of an immovable property. However, the term 'construction' is limited to supplies to the extent capitalized to an immovable property. 1.8 One of the types of procurements made is that of the pre-engineered structure ("PES"). 1.9 As can be seen in the above images, a PES is a enclosure system that always includes a structural system and often includes roof and wall cladding. 1.10 T....
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.... anywhere under the CGST Act or the CGST Rules made thereunder. 3.5 In the course of generally means something "in the progress of process of". 3.6 The meaning of "Furtherance" as per Black's law dictionary:6th edition 11th reprint 1997, is "act of furthering, helping forward, promotion, advancement or progress". 3.7 Furtherance of business will, thus mean, act of furthering business, helping forward business, promotion of business, advancement of business or progress of business. 3.8 As mentioned above, the Applicant is into the business of building and managing industrial warehousing spaces for consumers and industrial centres and PESs helps in giving value add to its Industrial customers and managing the Industrial spaces in more efficient and effective way. In other words, the subject civil works helps the Applicant in carrying out their business in their day to day operations. 3.9 Therefore, basis the above submissions, given that the Applicant procures PES works which are erected in warehousing spaces rented out by the Applicant, the condition as provided under Section 16 for availment of ITC stands satisfied. II. Restriction provided under Section 17(5) (c)....
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....perty. 3.17 The Applicant in this regard submits that, so far the business activity of the applicant is concerned, PESs are not capitalised as immovable property but are in fact recorded as 'plant and machinery'. 3.18 They can be detached and re-used and are not considered to be the permanent civil assets. It is for this very reason that these items are not capitalized as immovable property. 3.19 Thus, PESs are not covered under the definition of 'construction' and consequently is not restricted under Section 17(5). 4. PESs qualify as eligible credit under Section 16 of the CGST Act, Restriction provided under Section 17(5)(d) does not apply: 4.1 Basis the above submissions regarding the admissibility of the credit for works relating to PESs, the Applicant wishes to reiterate the analysis above as they same shall be applicable in the case of PESs as well. 4.2 The Applicant submits that as per Section 16 of the CGST Act, he is eligible to avail credit on such PESs as the same are used in the course or furtherance of Applicant's business. 4.3 It is pertinent to note that the restriction prescribed in Section17 (5) pertains to as inputs/ input services "for constr....
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....ons and floor slab), the foundations are designed to firmly anchor the structure to ground preventing them from being blown away by the wind. The slab provides a strong and stable base for the foundation and avoids direct contact of the foundation with soil. As seen above, PES foundation slab merely rests on the ground and are not imbedded in the earth. Therefore they cannot be classified as "immovable property" as described above. 7.2 Pre-engineered structures are different from that of conventional concrete buildings. They are often preferred as they are more efficient and effective as compared to concrete structures. Analysis of same has been brought out below:- Feature Pre-Engineered Steel Structures (PES) Concrete Building (RCC) Capacity Steel may carry up to 6 times its own weight. The carried load of concrete is almost equal to its weight Erection Easy, fast and efficient. Erection costs and time are accurately forecast based on extensive experience with similar buildings. Concrete construction takes more time to complete because it must be poured on site and allowed to cure before proceeding. Clear Spans Larger, up to 90 meters without in....
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....ctures that are erected in the site and joined together using bolts. They are not inextricably linked to the construction itself. b) The foundation is a slab which rests on the ground and neither rooted to the earth not embedded in the earth nor attached for the permanent beneficial enjoyment as the same can be detached and re-used at another site. c) It is adopted to meet business requirements efficiently and effectively and hence it is in the course or in the furtherance of business. 8. Inapplicability of the decision of the West Bengal Authority for Advance Ruling in the case of Tewari Warehousing: 8.1 In the Advance Ruling issued by the authority for Advance Ruling, West Bengal, in the case of M/s. Tewari Warehousing Co Private Limited, the question was whether the applicant is eligible for input tax credit pertaining to construction of warehouse using pre-fabricated technology. 8.2 The Authority reasoned that if the article cannot be used without fastening or attaching it to the earth and is not removed under ordinary circumstances, it may be considered permanently fastened to anything attached to the earth. 8.3 Furthermore, in the context of the ....
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....another location without any need to dismantle the floor of the previous location. 9. Judicial Precedents in relation to credit admissibility: 9.1 In the Advance Ruling issued by the authority for Advance Ruling, Uttarakhand, in the case of M/s VINDHYA TELELINKS LTD = 2018 (9) TMI 1646 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND, the question was whether the applicant is eligible for input tax credit on goods & services used in erection of infrastructure, which consists of "steel tabular pole, galvanized iron wire, nuts &, bolts, optical fibre cables, plastic pipes, clamps", for telecommunication service providers since the infrastructure provided by the applicant is different from "Telecommunication Tower". 9.2 It was held that the infrastructure provided by the applicant is different from "Telecommunication Tower" and it is not an immovable property as it can be easily be moved to another place for use without any damage to the entire infrastructure. The infrastructure being a movable property can be classified as 'goods' in terms of section 2(52) of CGST/SGST Act, 2017. The infrastructure provided being different from Telecommunication Tower, the applicant can avail....
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....s reliance on the Advance ruling issued by the Authority of the advance ruling in the case of Nipro India Corporation Private Limited = 2018 (10) TMI 745 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA where the question was whether the input tax credit of tax paid on cost proposed to be incurred in relation to civil works, mechanical works and electrical works can be admissible under the CGST Act, 2017. 9.10 It was held that the goods in question are used or intended to be used in course of furtherance is business and as per section 16 of the GST Act "Every registered person subject to such conditions and restrictions as may be prescribed would be entitled to take credit of input tax charged on supply of goods or services or both to him which are used or intended to be used in course or furtherance of business". 9.11 Further it is understood that credit with respect to various plant and machinery is admissible as per Section 16 of the CGST Act. 9.12 From the above, it can be inferred that the credit of input tax charged on the supply in the nature of various plant and machinery items are to be allowed as it is admissible under CGST/SGST Act 2017. 9.13 Thus, the Applicant s....
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....ed from the category of goods whereas at the same time, some immovable properties are treated as goods. But the terms movable and immovable property have not been defined under the GST Act. In laymen terms, any goods that can moved is a movable property and which cannot be moved is immovable property. 10.6 But the General Clauses Act 1897 and the Transfer of Property Act defines both these terms. Section 3 (26) of the General Clauses Act says: "immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth". Whereas, Section 3(36) defines movable property as "property of every description, except immovable property". So as per this definition, any property which does not qualify to be immovable property, is a movable property. This definition of immovable property under the General Clauses Act is affirmative in nature as against the definition contained in the Transfer of the property Act 1882, which is negative in nature. As per TPA, immovable property does not include standing timber, growing crops or grass. It further says that "attached to the earth" means: (a) roo....