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TMI Blog2018 (10) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... premises and civil work even inside factory) - works related to civil construction - demolition work. Ruling:- CENVAT credit on most services allowed except those mentioned above. - GST-ARA-33/2018-19/B-41 - - - Dated:- 28-5-2018 - SHRI B.V. BORHADE AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Nipro India Corporation Private Limited, the applicant, seeking an advance ruling in respect of the following question : Whether on facts and circumstances of the case, the input tax credit of tax paid on costs proposed to be incurred in relation to activities mentioned in Annexure 4 can be treated as admissible under the Central Goods and Services Tax Act, 2017 ( CGST Act, 2017 )? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of an immovable property other than plant and machinery. However, the Applicant submits that input tax credit in relation to Mechanical Works and Electrical Works should be admissible as such costs pertain to construction of plant and machinery. 2.3 The Applicant craves leave to submit such further facts at or before the hearing of the application as may be relevant Statement containing the Applicant s interpretation of admissibility of input tax credit in respect of the aforementioned activities The Applicant prefers to present the application before this Hon ble Authority on the following, among other grounds, each of which is taken in the alternative and without prejudice to the others. 1. Applicant s interpretation of law or facts: 1.1 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. 1.2 Accordingly to Section 16 (2) of the CGST Act, 2017 read with the second proviso to the section, among others, the following conditions need t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovable property. Therefore, the Applicant does not contest a claim to input tax credit on costs of civil works under the Extension Project. However, the provision also suggests that input tax credit would be available where such works contract services, goods and/or services are received for construction of an immovable property in the nature of plant and machinery. 1.5. Therefore, the present application for advance ruling is being filed to determine the eligibility of input tax credit in relation to costs proposed to be incurred for Mechanical Works and Electrical Works under the Extension Project. Mechanical Works entails activities in the nature of Plumbing work, Fire Protection work, Air Conditioning work, etc. and Electrical Works entails activities in the nature of Sub-station work, DG Set work, Lighting System work, etc. A detailed break-up of activities proposed to be undertaken in the nature of Mechanical Works and Electrical Works is provided in Annexure 4. 1.6 The term plant and machinery has been defined under Explanation II to Section 17 (5) of the CGST Act, 2017 to mean any apparatus, equipment and machinery fixed to earth by foundation or st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods or not has been dealt with by the Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills co. Ltd. vs. Sales Tax Officer, Kanpur [1997 (91) E.L.T. 34 (S.C.)) =1964 (10) TMI 2 - SUPREME COURT OF INDIA [Enclosed as Annexure 5). In this case, the issue was regarding the eligibility of goods to be included in the registration certificate of the dealer under Section 8 (3) (b) of the Central Sales Tax Act, 1956 ( CST Act ) only if such goods are used in the manufacture of processing of goods. The Supreme Court held that where any particular process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the said process or activity would fall within the expression in the manufacture of goods . They need not be ingredients or commodities used in the processes, nor must they be directly and actually needed for turning out or the creation of goods . Relevant extract of the judgement if reproduced below for your reference: 8. . Where any particular process is so integrally connected with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above submissions, in the current case, the Applicant believes that input tax credit in relation to costs incurred for Mechanical Works and Electrical Works should be admissible as such costs pertain to construction of plant and machinery. Further to above submissions, we most respectfully pray that: Allow us to reiterate all the submissions without prejudice to one another; Grant a personal hearing to put forth our contentions and explain our submissions before passing any order in this regard; Allow us to amend, alter and add to the present application; Allow us to produce additional documents and other material during the time of Personal Hearing; and Pass such orders and directions as may be deemed proper and necessary. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- In this regard the details asked by Advance Ruling Authority (GST). Mumbai is submitted as under The applicant has provided the details of activities proposed to be undertaken in the nature of Mechanical Works and Electrical Works in form of Annexure -4 to their application. On going through the Annexure-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional officer during the course of the proceeding before us. 1. We find that the Applicant, is a private limited company incorporated under the provisions of the Companies Act, 1956 holding GST registration number ( GSTIN ) AADCN1920C1ZZ with effect from 1st July 2017. The Applicant is engaged in the manufacturing of medical equipment such as dialyzers, blood tubing sets, arterial fistulas, syringes and needles. 2. The Applicant runs a manufacturing facility at Shirwal, Maharashtra. Goods manufactured by the Applicant are sold within India and also exported outside India. The Applicant proposes to undertake an extension of its manufacturing facility ( Extension Project ) located at MIDC, Kesurdi, Khandala, Taluka- Khandala, Dist. - Satara. The Applicant has awarded a contract to a vendor for the execution of this Extension Project. The list of activities and nature of costs proposed to be undertaken/ incurred under the Extension Project are provided in Annexure 4 by the Applicant. 3. Further factual position as stated by the applicant in his application is as under He submitted that based on the activities, the costs proposed to be incurred under the Exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or 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 utilization 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 en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. (4) A banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of sub-section (2), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse: Provided that the option once exercised shall not be withdrawn during the remaining part of the financial year: Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles and other conveyances except when they are used (i) for making the following taxable supplies, namely:- (A) further supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 74, 129 and 130. (6) The Government may prescribe the manner in which the credit referred to in sub-sections (1) and (2) may be attributed. 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. Thus from Section 16 of the GST Act it is very clear that 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. Thus the goods are used or intended to be used in course or furtherance of business. Further we find that conditions for taking input tax credit have been given in Section 16 which are as under:- (a) The person has to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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