TaxTMI 
TaxTMI 
2022 (4) TMI 1141
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....i Naal Road, Nasiyanur Road, Villarasampatti, Erode, Tamil Nadu, 638 107, (hereinafter called the 'Applicant') is registered under GST Vide GSTIN 33AAICC4646F1ZT. They have sought Advance Ruling on the following questions: Whether input tax credit of GST is admissible for supply of the following goods :- (a) steel, cement and other consumables (Annexure attached) to the extent of their actual usage in the execution of the works contract service when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory building with Gantry Beam, which in turn used for mounting across the pre-cast concrete beams, poles and over which the crane would be operated; (b) Structures, Pre cast, reinforced concrete beams, poles etc. (purchased as it is) which are used as supports to mount and operate the crane over 10 metres from ground, as shown in the pictures attached; and (c) Other capital goods, like rails which are fixed over the concrete arms for smooth travel of the over-head crane The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing ....
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....tative, Shri. V. Ravindran, Advocate appeared for the hearing and reiterated the submissions. He submitted a synopsis and purchase order for the reinforcement work (sample). He stated that Beam and the walls are strengthened to take the load of the moving crane for daily operation of WOEG, though these walls and beams are part of the factory. They are getting it done as Works Contract Service (WCS) and the invoice of steel, cement etc., are not in their name. It was stated that the entire WCS is being capitalized in their books of accounts. He further stated that the ruling is sought on whether they are eligible for ITC on the WCS service, rails installed on the beams which will become immovable property. The authorized representative stated that they claim credit proportionate to the incremental quantity required to support the construction towards the plant as the structure is not only a plant but also housing the plant. The indicative plan of the support structure; the invoice copies/Purchase orders/ Agreement for Works Contract Services for which ITC is sought for goods/services mentioned in the application; the details of whether credit has already been availed; details of ret....
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....nd machinery namely the gantry, the rails and the overhead cranes. The said foundation and structural supports are constructed by means of the inward supply of Steel, Cement and other building materials listed in the application, reaching the applicant through the works contract service for the erection of the plant and machinery. Consequently, it does not fall within the exclusion of "any other civil structures" (emphasis added} in the Explanation under Section 17 of the CGST Act. For this submission, we place emphasis on the word used in the said explanation viz. "other", which expression is crucial. It is obvious that the supplies (of goods and services) for civil structure towards construction of plant and machinery which require such foundation and structural support are excluded here in this Explanation by the word "other". (h) Section 17(5)(c)&(d) with the Explanation thereto make it amply clear that the construction of plant and machinery that, by definition, are fixed to earth by foundation or structural support is outside the list of "blocked credits" enumerated in Section 17(5). Therefore, the GST suffered by the applicant on the tax invoices for the inward supp....
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....e State Jurisdictional Authority, Assistant Commissioner (ST) Thindal Assessment Circle, Erode, who has the administrative Jurisdiction over the applicant has remarked that According to Explanation in section 17(5)(c) and 17(5)(d) of the CGST Act 2017 the applicant seems to be not eligible to avail ITC on the civil constructions of an immovable property. 5.2 The State Jurisdiction Officer was requested vide this office letter Rc.Al/409/2021, dated 14.12.2021 to cause verification of the all the ITC availed in the returns GSTR 3B under the column SI. No.4A(5) from the months January 2021 to October 2021 for which they have filed the application for Advance Ruling to ascertain whether the credit, the eligibility of which is now sought has been availed before filing of this application. The State Jurisdiction Officer reported vide letter Ref.No. 1223/2021/A4 Dated : 01.03.2022 that the tax payer has availed an amount of Rs. 2,44,47,231.00 towards ITC for the invoices received for the Services rendered (HSN Code:9954) for the month of March-2021 and reflected the same in the Electronic Credit Ledger as per Monthly returns filed in GSTR 3B for the month of September-2021 filed on 20.....
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....tors (WOEG) and that they suffer input tax on purchases of building materials such as steel, cement, structures, Pre-cast, reinforced concrete beams, poles etc., and works contract services, all supplied for construction of an immovable property in the form of the above mentioned Integrated Factory Building with Pillars and Gantry Beams, which support mounting, operations of crane over 10 meters from ground and other capital goods, like rails which are fixed over the concrete arms for smooth travel of the crane. They have sought ruling on the following:- Whether input tax credit to GST is admissible for supply of the following Goods and Services (a) Steel, Cement and other consumables to the extent of their actual usage in the execution of the works contract service when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory building with Gantry Beam, which in turn used for mounting across the pre-cast concrete beams, poles and over which the crane would be operated: (b) Structures, Pre cast, reinforced concrete beams, and poles etc., (purchased as it is) which are used as supports to mount and operate the cra....
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....orts(procured as such) and (3) other capital goods, like rails. 7.2 The applicant has furnished 'Proposed Construction of an Industrial Building -Description of the Structure' certified by a Structural Engineer, which gives the 'Item of Work' for 'Scenario-A-Isolated Factory Building alone (Without integration with Gantry beam structure)' and 'Scenario B(Actual)-Integrated Factory Building(Integrated with Gantry Beam)'. From this it is seen that in respect of Integrated Factory Building, in addition to the standard requirements for an Isolated factory building', there is 'Increment in volume' of Earth work Excavation, Foundation, Column to Stub/Floor level, Foundation refill; Increment in the size of Plinth Beam& Precast Tie Beam and Precast concrete Gantry Beams at the required heights to mount crane rails. 7.3 The applicant has furnished copy of agreement entered into by the applicant with M/s. Teemage Builders Private Limited dated 4th August 2020, in reference to the quotation Ref: Teem/sales/mvk/2002021/005 and the said quotation is not furnished. Therefore, the scope of work covered under this agreement is not explicit. The ap....
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....as not furnished the details of 'other capital goods' and also the factual details as to whether 'rails' are procured by them per-se, or rails are also laid as a part of Works Contract services. The agreements and the copies of Invoices furnished in support of the questions raised by them shows that they have availed the services of Works Contract' of construction of Integrated Factory. 7.4 Advance ruling is a facility extended to the applicants to have clarity on applicable taxes and the eligible credits based on the facts. In the case at hand, from the submissions, it is seen that the applicant procures services for construction and has not furnished any documentary substantiation for having procured 'Pre-casts, Reinforcement concrete slabs, other supports', as it is, as claimed by them and the details of specific Capital goods for which the eligibility to credit is sought. Ruling can be extended only on verification of the facts and therefore their eligibility to credit in respect of 'Pre-casts, Reinforcement concrete slabs, other supports' and 'the Capital goods' cannot be answered for want of substantiating documents. Thus, the qu....
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....ables used are to be eligible for credit as 'Plant and machinery'. In the case at hand, the supply received by the applicant results in construction of a civil structure which is in the form of a factory. The factory is nothing but a building where people use machines to produce goods or services or both. The foundation and walls though are strengthened is again only a part of the factory, which is in the genre of 'Civil Structure'. Any factory premises will be designed and constructed to support the 'Plant and Machinery' to be housed in it for the operation/ production of the goods for which such factory is intended. The entire construction of the 'Integrated factory premises' with the strengthening of the walls, increase in the volume/ size of plinth beam, etc are only part of Civil structures of the Factory housing the 'Plant and Machinery' and are not the foundation with which such 'Plant and Machinery' are fixed to earth. The same, at best is an added measure to bear the load of the 'Plant and Machinery' installed in the factory. Therefore, the additional foundation/beams are to be considered as 'any other civil struc....