TaxTMI 
TaxTMI 
2021 (12) TMI 213
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.... (i) The Applicant is engaged in the manufacturing of Charger of Mobile Phone & its Parts or Sub-Parts. (ii) The Applicant has purchased an old Factory situated at B-204, Phase-II, Noida for Expansion their business and in said factory applicant shall also make new construction to setup plant and machinery. (iii) The Applicant will use aforesaid factory for Manufacturing & other related activities. (iv) The list of activities and nature of cost proposed to be undertaken/incurred under the above said property are provided as under: S.No. Major Head Sub-Head Whether ITC Available on below Activity 1. Building Work 1. Cement, iron, dust, sand, bricks, bonding cemicals, concrete used in buiding for construction and repairing of production floors. 2. ITC on labour contractor payment (used in making of production area.) 3. Painting of building. 4. False sealing and lights. 5. Wire Fitting on Production Floor. 6. Furniture & Fixture for Production Floor. 7. Furniture & Fixture for office. 8. Tiles used in production area. 2. Electrical Work Sub-Station Work (Including Wiring) 1. The Sub-Station is used for electricity supply for Production/utility for ....
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..... The applicant has submitted their interpretation of law as under- (i) According to Section 16 of the CGST Act every registered person is entitled to input tax credit, subject to conditions and restrictions specified in rules, if the person made purchases to use or intended to be used in the course of or furtherance of his business. (ii) But Section 17(5) stops the registered person to avail input tax credit on such supplies which have been specified under this section 17 (5) of the CGST Act. (iii) Section 17(5) (c) and 17 (5)(d) blocks input tax credit relating to supplies of Works Contract and goods or services or both received for construction of an immovable property. (iv) Section 17 (5)(c) says that 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; (v) Section 17(5)(d) says that 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. Ex....
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....of the activities are in relation to the production floor but since they fall under civil structures hence, ITC on these services are also not available in terms of the definition of the Plant & Machinery as provided under Explanation to the section 17(5) of the Act ibid. As regards, the fire extinguisher is concerned the ITC appears to available, as there are no bar put up on the same under section 17(5) of the Act. 7. The applicant was granted a personal hearing on 31.05.2021 which was attended by Shri Shobhit Goel, Advocate/Authorized representative. During personal hearing, he reiterated the submissions made in the application of advance ruling and requested to decide the case accordingly. DISCUSSION AND FINDING 8. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned a....
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....such other tax paying documents as may be prescribed; (b) he has received the goods or services or both. Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax ....
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....d Chapter VI, the expression "plant and machinery" means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes- i. land, building or any other civil structures; ii. telecommunication towers; and iii. pipelines laid outside the factory premises. 14. According to Section 16 (1) of the CGST Act, 2017, every registered person is entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used by him in the course or furtherance of his business. We find that apart from conditions as laid down under Section 16 of the CGST Act, 201 7; Section 17 provides for restrictions and factual position and situations where ITC would not be available. 15. Pursuant to the aforesaid legal provisions, the following conclusions can be drawn: (1) ITC restricted in case of construction undertaken on own account Clause (d) restricts input tax credit of goods and services used by a person for construction of an immovable property (except plant and machinery) on his o....
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....ncluding works contract service used towards construction of immovable property that is desired to be capitalized in the books of accounts shall not be admissible When the goods or services are bought for construction of immoveable property which will be used in the course of business, the GST paid on such good or service is also not eligible- to be claimed as Input tax credit if the immoveable property is constructed for own purpose, as the owner will become the end user and he cannot avail ITC of cost incurred on construction goods, as there is a break in the tax chain. 16. We find that the applicant had submitted details of nature, function, use, utility of different items on which admissibility of input tax credit has been sought. We proceed to examine one by one. 17. The first Major head mentioned at Sl. No. 1 is Building Work wherein ITC availability on (1) Cement, iron, dust, sand, bricks, bonding chemicals, concrete used in building for construction and repairing of production floors (2) labour contractor payment (used in making of production area) (3) Painting of building (4) False sealing and lights (5) Wire Fitting on Production Floor (6) Furniture & Fixture for Produ....