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TMI Blog2021 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable for construction of immovable property. GST amount borne by M/s J M Chemicals on subject service received is blocked credit vide Section 17(5)(d) CGST Act and thereby ineligible for availment. - GUJ/GAAR/R/55/2021 - - - Dated:- 18-10-2021 - SANJAY SAXENA AND ARUN RICHARD, MEMBER Present for the applicant: Shri Darshan D. Jain, CA BRIEF FACTS M/s J M Chemicals, hereinafter referred to as M/s JM for the sake of brevity, has purchased rights of the Industrial Plot situated at GIDC Panoli Industrial Estate bearing Plot No. 205/206/207/07 and admeasuring 2894.960 sq mts at Unit Price of ₹ 3706/-. The transferor M/s Ginni Filaments Ltd has charged GST @18% on the Sale of Transferring the Rights of the Industrial Plots by executing the deed of assignment dated 29.06.2020. M/s Ginni Filaments has developed the piece of Land with road, amenities and has made many plots in the said piece of Land. M/s. Ginni Filaments has done the conveyance of the said sub plots by deed of assignment of lease to its members. 2. The applicant submits that Long Term Lease premium is exempt from tax under Entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng sought 7. Whether M/s. J.M. Chemicals is eligible to claim Input Tax Credit of GST paid on input services of Lease Premium paid to Ginni Filaments on which they have charged GST under the head miscellaneous receipt under SAC code No. 99979. Personal Hearing 8. Shri Darshan D. Jain, CA appeared for the hearing (video conferencing) and reiterated the contents of the application. He informed that M/s JM obtained the lease hold right on the land on which its factory building including administrative block will be constructed. DISCUSSION FINDINGS 9. We have carefully considered all the submissions made by J M. 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. 10. We find that JM has purchased rights of said industrial plot from transferor M/s Ginni and borne the GST @ 18% on the subject supply on receiving the Rights of the industrial plot on execution of the Deed of assignment. JM seeks Ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for Advance Ruling for Karnataka(in their Ruling No.KAR/AAAR-14/2019-20 dated 06.02.2020), while examining the aspect of eligibility for input tax credit of various goods of the appellants covered under the definition of plant and machinery held that the word or in clause (d) of Section 17(5) of the CGST Act can be read as and since it appears to give effect to the intention of the Legislature to allow input tax credit on the construction of plant and/or machinery. Relevant portion of the aforementioned Ruling reads as follows: 15. It is the contention of the appellant that the definition of the expression plant and machinery as used in Chapter V and Chapter VI of the CGST Act cannot be applied to interpret the words plant or machinery used in clause(d) of Section 17(5) of the CGST Act. We find that in ordinary usage and is conjunctive and or disjunctive. From the well known dictum of the Supreme Court that grammar is a good guide to meaning but is a bad master to dictate, it will appear that there is no hard and fast rule as to the meaning of the word or and this word gets its proper meaning from the particular context from which it has been used. Justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such services are used in the course or furtherance of business. v. For if there was no such legislative intention, the word land need not have been used in the said exclusion expression of plant and machinery . 13. Further, besides the discussed legislative intent, the very wordings of Section 17(5)(d) itself blocks subject credit admissibility, detailed as follows: 13.1 We find that the words used in the said Section 17(5)(d) reads as: services received by a taxable person for construction of immovable property (other than plant or machinery). Hypothetically, if the word used was in the place of for , then said Section 17(5)(d) would be read as: Services received by a taxable person (used in) construction of immovable property (other than plant or machinery) . In such a hypothetical case and limiting to the wordings of Section 17(5)(d), there would have been a prima facie merit in the submission of the JM to consider that subject ITC is not blocked. But the word used in the said Parliamentary Act in said clause (d) is for and not used . The word for indicates a purpose, an intended goal. Here, for is to be construed to indicate the purpose to construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years or more of industrial plot or plot for development of infrastructure for financial business, provided by the State Government Industrial Development Corporation or undertaking or by any other entity having 50% or more ownership of Central Government, State Government, Union Territory to the industrial unit or the developer in any industrial or financial business area. Justification for exemption (as mentioned in letter of the Hon ble FM of Punjab): India is now critically poised to attract foreign investments particularly by the possible relocation of many MNCs located in China in the context of ongoing tariff war and global economic recession. India offers an attractive destination for investment by way of FDI due to its high domestic consumption base. GST on long term lease of land presently attracts GST of 18% along with stamp duty of 6-7% levied by states. This high rate of tax makes new projects unviable particularly when tax credit of GST on such leasing is not available for construction of immovable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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