TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 281
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.... APIs is as below:- Introduction of API starting material and Solvent Raw materials and Solvents: The API manufacturing begins with the procurement of raw materials including active substances, reagents, and solvents. These materials must meet stringent quality standards to ensure the efficacy and safety of the final product. These materials are carefully measured and introduced into the reaction vessel, typically a reactor, under controlled conditions. Production of intermediate by chemical reaction in Reactor Chemical reaction in Reactor: Chemical reactor is a specialized vessel equipped with agitators (stirrers) to ensure thorough mixing of ingredients, and heating/cooling jackets to control the reaction temperature precisely. Inside the reactor, the starting raw materials are dissolved in the solvent, to undergo a controlled chemical reaction. This reaction transforms the starting material into an "intermediate" product. Isolation and Purification Once the intermediate is formed, it needs to be separated from impurities (like unreacted starting materials, by-products and spent solvents) and purified to ensure it meets the re....
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....s with the solvent to undergo controlled chemical reaction, which yields an intermediate product. Further, such reactors are also used in downstream processes including distillation and crystallization for manufacturing APIs. Agitated Nutsch filter/Centrifuge: This equipment is a combination of a filter and dryer in one unit, and is used to separate solids from liquids, wash and dry the product. Condenser: This is a crucial equipment in the API manufacturing process. The condenser removes excess heat from the system, which is essential for maintaining the desired temperature during chemical reactions. It also aids in the phase change of solvents and other chemicals from vapor to liquid, which is particularly important in processes like distillation and crystallization. Condensers are also used to recover solvents by condensing the vapor back into liquid form. Blender: A blender is used for homogenous mixing of the API and excipients, which helps in maintaining the uniformity of the active ingredient throughout the batch, ensuring each dosage form contains the correct amount of API. Sifter: A sifter is used for separating particles such as fibers, metal fr....
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....ion which is also integral part of building. 2. Civil, Structural and Architectural work for fire pump house The fire pump house is a civil structure that houses various large tanks and pumps for the fire system. In order to install the various tanks and pumps, the Applicant is required to construct RCC structures which include key load-bearing elements such as slabs. pedestals, etc. which are specifically designed to support the load of all installed equipment and ultimately transfer these loads to the ground. 3. Civil, Structural and Architectural work for sub-station The sub-station is a civil structure that houses various large electrical panels, diesel generators and transformer for the electrical system which supports the entire manufacturing plant area. In order to install such machinery and equipment, the Applicant is required to construct RCC structures including key load-bearing components such as beams, slabs, pedestals, etc. which are specifically designed to support the load of all installed equipment and ultimately transfer these loads to the ground. 4 Civil, Structural and Architectural work for OSBL pipe rack The OSBL pipe racks are critic....
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....ffluent Treatment Plant and Sewage Treatment Plant is a civil structure that houses various process and utility equipment for the treatment plants. It also includes MEE and RO plant. In order to construct the ETP and STP plants, the Applicant is required to construct robust RCC foundations to support various equipment installed in the ETP and STP. For this purpose, the piling and backfilling work is critical for preparing the plants' plinth below the concrete for various RCC structures. The piling, back filling and construction work for RCC foundation of the STP and ETP are used for the foundational and structural support of plant and machinery installed therein as it establishes a uniformly stable and unyielding base across the plant. 11. Structural Steel The OSBL pipe rack mentioned above is an essential structure designed to route and support the pipelines that carry raw materials, finished products and utility lines. In order to construct the pipe rack, structural steel members are used, which serve as the primary support framework for the pipelines. Such structural steel framework bears both the self-load of the pipe rack and the dynamic load of the materials be....
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....C on input services used for construction of foundation and structural support for plant and machinery installed within the factory of the Applicant, for manufacture of Active Pharmaceutical Ingredients, in terms of Section 17(5)(c) of the CGST Act, 2017 ? 10. The applicant has submitted their interpretation of law as under:- (a) The inputs and input services procured by the Applicant are in the course or furtherance of business of the Applicant in terms of Section 16 of the CGST Act. The API plant is to be used for manufacturing of APIs which will be supplied by the Applicant to its customers. Thus, the input services procured by the Applicant for construction of foundation and structural support for various equipment at the factory of the Applicant is in the course or furtherance of business of the Applicant. (b) The input services procured by the Applicant are used for foundation and structural support of the equipment installed for manufacturing of APIs, which are 'plant and machinery' in terms of Explanation to Section 17 of the CGST Act. In order to qualify as 'plant and machinery' in terms of Explanation to Section 17 of the CGST Act, two major requireme....
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....oad of heavy equipments. It includes key load-bearing elements such as columns, beams, slabs, pedestals, etc. In the present case, tank farms were installed on RCC circular platforms and machinery are installed on structural steel tied with steel beams connected to RCC beams to give structural support, strength and stability. (h) Structural steel plays a crucial role in the installation and support of equipment due to its high strength-to-weight ratio and ability to withstand heavy loads. In the present case, OSBL pipe racks are designed to support the routing of pipelines that carry raw materials, finished products, and utility lines. These pipelines enable the transfer of materials between storage tanks and various process units, including Sartan and other connected facilities. Therefore, structural steel is used to provide primary support and stability to OSBL pipe racks, bearing both the self-load of the pipe rack and the dynamic load of the materials being transported. (i) Detailed functions of various equipments installed with RCC and structural steel are as follows :- Foundational and structural support to equipments in Sartan plant; During API man....
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....al and thermal stresses. Structural support for a boiler is essential due to the equipment's size, weight, operational dynamics, and safety-critical role in industrial and commercial facilities. Failure of which can lead to boiler distortion, tube leakage, misalignment, etc. RCC support to equipment in WTP plant: Equipments like filters, clarifiers, pumps, etc., are heavy, operate continuously and accommodated in WTP plant. RCC support for these equipments provide structural support for both stationary and dynamic equipment. RCC is essential not just for load-bearing capacity but also for operational safety, durability, and regulatory compliance. (j) It is submitted that ITC has been availed solely in relation to the foundational and structural support provided to plant and machinery as iterated above through RCC and structural steel components. It is further submitted that no ITC has been claimed in respect of civil works such as brickwork, plastering. flooring, or any other construction activity not directly attributable to the installation or support of equipment. (k) It is further submitted that all the components of the equipments are capable of bein....
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....ed for the applicant and reiterated the facts & grounds as stated in the application. Discussion and findings 13. At the outset, we would like to state that the provisions of both the CGST Act and the GGST 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 provisions under the GGST Act. 14. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made both oral and written during the course of personal hearing. 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. 15. The short issue to be decided is whether the applicant can avail ITC on the input services used for the construction of foundation and structural support for the equipments installed inside the API plant. The equipments which are installed in these plants are Reactors, Kettles/Reboiler/Distillation columns, Phase separators, Heat Exchangers, Agitated Nutsch filter/Centrifuge, Co....
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....rvices used in the construction of foundations and support structures. These services are provided by M/s Vimit Construction. The details of work undertaken for the foundation and steel structures by the service providers, on which the various machinery and equipment are to be installed in the API plant, have been mentioned in Para 6 supra. The foundations are mostly MS Steel Structures and RCC, which comes under the ambit of works contract service. Section 17(5)(c) of the Act, ibid restricts the ITC of works contract services when supplied for construction of an immovable property. However, if the said works contract services are used in the construction of plant and machinery, then the ITC of the same can be availed by the service recipient. 18. Thus, the issue for determination is whether the foundation and structural support fall under the definition of 'plant and machinery' as mentioned in Section 17 of the Act. Explanation to Section 17, defines what comes under the ambit of 'plant and machinery', which we reproduce below:- Explanation:- For the purposes of this Chapter and Chapter VI. the expression "plant and machinery" means apparatus, equipment, and machinery ....
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....so been provided. He has also emphasized that many machineries cannot be installed directly on open ground; rather, specialized civil structures are essential to manage dead loads, torque, vibrations, Dynamic load etc. Adherence to the relevant IS Codes is mandatory to ensure operational stability, prevent overturning, and reduce vibrations. In conclusion, he has submitted that the machineries were supported on RCC and Steel structures and these structures were made only to support the machines. 21. We find that CBIC in Circular No. 219/13/2024-GST dated. 26.06.2024 has clarified that ITC on ducts and manholes used in network of Optical Fiber Cables (OFC) are eligible, as they are the basic components for the OFC network used in providing telecommunication services. These ducts are necessary for not only laying of OFC but also their upkeep and maintenance. It was further observed in the Circular that ducts and manholes are covered under the definition of "plant and machinery" as they are used as part of the OFC network for making outward supply of transmission of telecommunication signals from one point to another. Moreover, ducts and manholes used in network of optical fibre ca....
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.... the order is reproduced below:- "16. On going through the layout of the VCV line which is reproduced in the impugned ruling, the process inside VCV tower undertaken at each floor and the weight of the significantly heavy components to be placed on each floor [reproduced supra], we are in agreement with the appellant's averment that the concrete structure is essential to support and erect the VCV lines. It is more so since the appellant has stated that the concrete structure in the form of VCV tower serves as a critical foundation and support system for the manufacturing process; that it provides stable base for tower components; that it absorbs vibrations & ensures accurate positioning of extruder, cross head and other elements. Given these facts, we find that plant and machinery in terms of the second explanation, placed beneath section 17, ibid, specifically includes foundation and structural support. The exclusions from plant and machinery are also listed viz. (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. Further, 'other civil structures' means ....