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TMI Blog2020 (7) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 17. while providing the meaning of the term plant and machinery, it has been clearly stated that Buildings and Civil Structures shall not be covered under the term Plant. However, while so clarifying, it has been accepted and understood that plant and machinery many a times requires support structure and / or foundation for installation and cannot work otherwise. Thus, civil structures and foundation as supporting structure for fastening of plant and machinery to earth has been included as part of plant and machinery. Eligibility of ITC in case of Input Tax paid on Purchase of Water Slides - HELD THAT:- Water Slides shall fall within the meaning of the term apparatus, equipment and machinery and therefore, shall be eligible for claim of ITC. ITC on Steel and Civil Structure on which the Water Slides are installed - HELD THAT:- The foundation and support structures which are used to fasten plant and / or machinery to the Earth is classifiable as Plant and / or Machinery - In the instant case. slide are fastened to the Steel and Civil Structure are affixed to the Earth through these Steel an Civil Structures. Therefore, these Steel and Civil Structures shall form pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods or services involved in the construction of immovable properly which is a civil structure or building is not available to the applicant and hence blocked. - Case No. 29/2019, Order No. 12/2020 - - - Dated:- 9-6-2020 - SHRI MANOJ KUMAR CHOUBEY AND SHRI VIRENDRA KUMAR JAIN, MEMBER PROCEEDINGS (Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods Service Tax Act, 2017) 1. M/s Atriwal Amusement Park (hereinafter referred to as the Applicant) is engaged in construction of Water Park, for construction of the same various components services will be used. All such components services are taxable under GST. The Applicant is not registered. However the Applicant has declared that he is desirous of obtaining registration in GST. 2. The provisions of the CGST Act and MPGST Act are identical. except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth. for the purposes of this Advance Ruling, a reference to such a similar provision under the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work. Definition of plant machinery specifically includes foundation or structural support hence its credit should he allowed. Also for Installation of Machines (Machine generating waves in water pool) applicant is required to construct machine foundation and room for protection of this machine as without that protection machine cannot operate effectively As per the explanation it is specifically covered under the definition of plant machinery in foundation or structural support hence its credit should be allowed. 5.4 In regards to point no. 3 it is hereby submitted that for installation of water slides applicant is required to create a strong base which involves area development, digging process creation of base using concrete. iron, steel etc. As without creating base nor the structural support can be installed nor the water slides. It is the foundation for placing water slide as slides will be attached to base through screw. Hence Input and input service used in construction of base/ foundation for laying slides directly covered under the definition of P M under structural support and foundation. 5.5 In Regards to Point No. 4- Swimming pool / Wave P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and / or machinery is fixed / fastened to the earth by a foundation or civil structure then such foundation or civil structure shall be included in plant and machinery. 4. It is important to see why the exclusion to the term building and civil structure has been provided for in law. The term plant has a wide meaning and it changes with the context and purpose of the law under which the matter is being sought to he interpreted. The term plant is defined as under in Cambridge Dictionary: machines used in industry: a factory in which a particular product is made or power is produced: a large, heavy machine or vehicle used in industry for building roads. etc. (https://dictionary.cambridge.org/dictionary/english/plant) 5. Further in Merriam Webster, plant is defined as under: a : the land, buildings, machinery, apparatus, and fixtures employed in carrying on a trade or an industrial business b: a factory or workshop for the manufacture of a particular product also : powerplant c: the total facilities available for production or service d: the buildings and other physical equipment of an institution (https://www.merriam-webster.com/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rule 57Q, the definition in Explanation 1 (a) of capital goods, as meaning machines, equipments, apparatus, tools, appliances used for producing or processing the goods etc., clearly indicate the intention of the rule making authority to give the wider meaning to the expression plant but to give a narrower meaning which is suitable in the context. Plant-. therefore. could he regarded as machine or group of machines fitted in such a manner as to serve the purpose of manufacturing any particular product, and the whole system of machine has to be regarded as Plant. 7.3 The Karnataka High Court in the matter of J.K. CEMENT WORKS Vs STATE OF KARNAIAKA reported in 2017 (7) G.S.T.L. 408 (Kar.) = 2017 (4) TMI 6 - KARNATAKA HIGH COURT came to the conclusion that Cement although specified in Fifth Schedule. since it is used for laying foundation and erection of cement manufacturing plant and machinery, prior to commencement of commercial production, constitutes part and parcel of plant and thus capital goods used for manufacturing of cement later on. In the order, at para 11 and 12 the Honorable High Court stated as under: 11. We see no justification in the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authority. He has merely proceeded on the basis that the decisions relied on by the appellant are not applicable as they were rendered with reference to Income-tax Act. 11. Therefore, the word installed is used in connection with the words plant and machinery , can also refer to installation of a factory building. After all, the intention of the Notification is to encourage setting up of new industries in Karnataka. There is nothing in the Act or the Notification to exclude the factory building from plant . We find no reason why the meaning attached to the said work, while examining the provisions of the Income-tax Act, cannot be applied while construing the meaning of the said word in the exemption Notification issued under the Karnataka Sales Tax Act. Therefore, the mere use of the word installed with reference to plant and Machinery is not sufficient to exclude the factory building, from the scope of the plant and machinery used in the Notification dated 15-10-1981. Hence, we feel that the Revisional Authority ought to have examined these aspects with reference to the functional tests. In fact, none of the authorities have examined the matter with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pounded in Jarrold v. John Good and Sons Limited, 1962 40 T.C. 681 C.A., held that sanitary and pipeline fittings fell within the definition of plant. In Inland Revenue Commissioner v. Barly Curie Co. Ltd, 76 I.T.R. 62 . the House of Lords held that a dry dock, since it fulfilled the function of a plant, must be held to be a plant. Lord Reid considered the part which a dry dock played in the assessee company s operations and observed : It seems to me that every part of this dry dock plays an essential part The whole of the dock is. I think, the means by which, or plant with which, the operation is performed. Lord Guest indicated a functional test in these words : In order to decide whether a particular subject is an apparatus it seems obvious that an enquiry has to be made as to what operation it performs. The functional test is. therefore. essential at any rate as a preliminary . 7.6 Indian Courts as well as English Courts. depending upon the context of law, have treated even the assets like dry dock, silos built in the shipyard freezing chamber in the case of cold storage, cinema building. etc. as falling within the definition of Plant . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r setting where the restaurant business was carried on and was not plant and hence. the expenditure on them did not qualify for capital allowance. 8. To set to rest the disputes regarding the definition of the Plant, in light of the fact that input tax credit of works contract services, goods and services received as input for construction of immovable property on own account has been specifically put under the Blocked Credit list with the rider that it shall not apply to plant and machinery, it was incumbent that there should be clarity regarding classification of buildings and civil structures that were hitherto been classified as Plant . 9. Accordingly. in the explanation relating to Plant and Machinery, beneath sub-section (6) of Section 17. while providing the meaning of the term plant and machinery, it has been clearly stated that Buildings and Civil Structures shall not be covered under the term Plant. However, while so clarifying, it has been accepted and understood that plant and machinery many a times requires support structure and / or foundation for installation and cannot work otherwise. Thus, civil structures and foundation as supporting structure for fast ..... X X X X Extracts X X X X X X X X Extracts X X X X
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