2023 (5) TMI 920

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....tarted setting up of the new factory. 4. The manufacturing process flow chart is provided as Annexure 1 to their application. For manufacturing Dyes, they require various plant and machinery [for short - 'P&M'], primary being Sand Mill and spray dyer and HAG machine. These machines are required to be fixed on earth by foundation or various structural supports which are of MS steel/foundation structure. 5. The applicant in his application has fairly admitted that the ITC on works contract utilized in Administration building and Warehouse would be treated as blocked credit. However, he is before us seeking a ruling on the eligibility of ITC on works contract services & material procured and utilized towards foundation for setting up of the following machineries • Sand mill and spray dryer • HAG plant • ETP as well as having tank farm and fire tank and • DG set. 6. In view of the foregoing, the applicant has filed this application seeking advance ruling on the below mentioned questions viz • Whether the applicant can avail ITC on [a] WCS taken for structure on which machineries are fixed to eart....

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....eived in the matter. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 11. Before adverting to the submissions made by the applicant, we would like to reproduce the relevant provisions, competing tariff entries, etc for ease of reference: Section 17. Apportionment of credit and blocked credits.- (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:- [(a) motor vehicles for transportation of persons. (aa) vessels and aircraft except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vessels or aircraft: or (B) transportation of passengers: or (C) imparting training on navigating such vessels; or (D)) imparting training on flying such aircraft; (ii) for transportation of goods: (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to mot....

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....roperty; (e) goods or services or both on which lax has been paid under section 10; (f) goods or services or both received by a non-resident taxable person except on goods imported hy him: (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of sections 74, 129 and 130. Explanation.- For the purposes of this Chapter and Chapter Fl, 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 hut excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid ouitside the factory premises. 12. The applicant's primary contention while contending that they are eligible for ITC is that • the structure & building are independent & separate; • that the foundation is being built to su....

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....G set is independently and separately appearing on structure fixed to earth by foundation; • Near adjourning sub-station building of civil structure is created to cover electric control panel. 14. The applicant has submitted the photographs of the structure. The same is scanned & reproduced below for ease of reference: 15. The applicant has in his additional submissions, submitted certificate dated 13.3.2023 by Padaria Consultants (P) Ltd, Chartered Engineer. The relevant observations as per the certificate states as follows: • Sand Mill and Spray Dryer Machineries & Equipments • that customized structure is to be designed to hold the said machineries and equipments; • that capacity of foundation to earth is made as per load requirement & therefore 8 meters foundation has been created. • that there are load bearing pillars which travel upto foundation; • that around 28 meters vertical MS structural support and around 1895 square meters horizontal civil structural support is required to carry perpendicular load of machineries and equipments. • that the machineries and equipments cannot s....

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....th 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 - • land, building or any other civil structures; • telecommunication towers; and • pipelines laid outside the factory premises. 18. On examining the contention of the applicant, read with the certificate of the chartered engineer, a bare look at the photographs provided by the applicant when seen in conjunction to what is mentioned in section 17 ibid, which deals with apportionment of credit and blocked credits, we find that the law is unambiguous as far as ITC is concerned in respect of the P&M. ITC is not available in respect of works contract services when supplied for construction of an immovable property. Further, ITC is not available for goods, services or both received for construction of an immovable property even when used in the course or furtherance of business. However, the sub-clauses specifically exclude in both the cases, plant and machinery. Noteworthy is fact that the second explanation which defines plant and machinery [for the purp....

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....not eligible for the ITC in respect of the foundation made to install the ETP [effluent treatment plant]. 19.3.2 Our above view is substantiated by the ruling in the case of Synergy Global Steel Pvt. Ltd. [reported at 2021 (48) G.S.T.L. 286 (A.A.R. - GST -Haryana)], wherein it was held as under 4.6 The explanation to Section 17(5)(d) of the GST Act reads as under :- 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 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 In the explanation given above, it is clear that "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 with some exclusions ....