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TMI Blog2018 (5) TMI 1848X X X X Extracts X X X X X X X X Extracts X X X X ..... etion and testing of the network of the pipeline, the balance dues of the appellant are released marking the completion of the project. The nature of the work of the tender being a works contract, the appellant used to discharge its liability as per the rates specified in the Gujarat Value Added Tax Act, without claiming any benefit of the input tax credit on any items purchased (big or small) and used in the work as specified in the tender. 3. The release of the payment of the supply of pipes is tied up to different stages and laying of pipe lines fixed by the RMC as follows Sr.No. Event / Milestone % of payment released A Supply of pipe line (material supply covered in item 2 of BOQ) 90 B Excavation of trench (only labour item covered item no. 1 of BOQ) C Laying and jointing of the pipe line only labour item covered in item 3 of BOQ D Testing (against leakages) and commissioning of the project only labour item covered in item 3 of BOQ 10 4. The appellant submitted that while the project of RMC was semi-finished, the Goods and Services Tax Act (GST) got implemented, posing a challenge to the appellant to enjoy the credit of material bought in pre-GST era as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of balance 10% ownership of pipes and another towards the labor charges. It is submitted that there is no iota of doubt about the fact that only part ownership in works was transferred before 1st July 2017. The appellant submitted that in its case, as the balance 10% ownership was nowhere transferred before the advent of Goods and Services Tax Act, it is entitled to claim part of the transition credit represented by duties and taxes of excise and VAT paid by it on the pipes. It is submitted that this has been absolutely missed out by the Ld. Advance Ruling Authority and hence, the order of advance ruling authority is bad in law. It is submitted that the project i.e. contract of the appellant is still in work-in-process stage and that only a part ownership of the pipes is transferred as per theory of accretion. When after the applicability of Goods and Services Tax Act, the balance ownership of 10% is passed, in view of the provisions ingrained in Section 140(6), the claim of input credit under transition provisions must be declared as held admissible. The appellant submitted that it is in possession of duty paid documents and for the purchases made within 12 months immediately pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant has referred to sub-section (6) of Section 140 of the Central Goods and Services Tax Act, 2017 (herein after referred to as the 'CGST Act, 2017' and the Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the 'GGST Act, 2017'), which reads as follows :- "(6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely :- (i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; (ii) the said registered person is not paying tax under section 10; (iii) the said registered person is eligible for input tax credit on such inputs under this Act; (iv) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of inputs; and (v) such invoices or other prescribed documents were issued not earlier than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered person to take credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day, subject to fulfillment of conditions prescribed therein. These provisions do not envisages entitlement of transitional input tax credit on proportionate basis. 10.6 Section 2(52) of the CGST Act, 2017 and the GGST Act, 2017 defines the term 'goods' as every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. The work of the appellant falls within the definition of 'works contract' as given under Section 2(119) of the CGST Act, 2017 and the GGST Act, 2017 as the construction of pipeline network becomes immovable property. Therefore, even if the contract of the appellant was on work-in-process stage on the appointed day, the same would not be covered within the terms 'semi-finished or finished goods' as the term 'goods' covers movable property and not immovable property. 10.7 In view thereof, the appellant is not entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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