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TMI Blog2022 (2) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... d taxpayer to avail credit on goods or services used or intended to be used in the course or furtherance of business. Irrespective of the fact that the goods or services are used for construction of immovable property which in turn will be used for conducting business, credit is not available; if the ownership of the property remains with the said person. In order to install/embed the said power plant at the roof top of its own building, there would be construction/erection of pillers on which the said plant is to be installed and certainly there would be lot of other civil work which support to construct the said plant. Such work can not be done without fasten and embed the part of said plant at roof top of the building - the roof top of the building is attached to earth and simultaneously plant to be fastened/embedded is attached to roof top. This results in 'permanently fastened to anything attached to the earth' as per Section 3(26) of the General Clauses Act, 1897. Further, for the purposes of clauses (c) and (d) of sub-section 5 of Section 17 of CGST Act, 2017, the expression construction includes re-construction, renovation, additions or alterations or repairs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (d) given as under:- (d) Admissibility of input tax credit of tax paid or deemed to have been paid; A. SUBMISSION AND INTERPRETATION OF THE APPLICANT: 1. M/s Prestine Industries Limited (CIN U2520PN2003PLC018148) is registered on GSTIN with No 08AACCC4299A1ZT (Herein after called Applicant company) dealing with manufacturing of PP/HDPE Woven Sacks at Abu Road (Dist: Sirohi), Rajasthan which is taxable at the rate 01 18% under GST Act. 2. The applicant company is under the process of installation of a 620+ kW roof top Solar Power Generating Plant at its manufacturing unit for captive consumption of electricity so generated from the above plant for its PP HOPE Woven Sacks manufacturing unit at Abu Road (Dist: Sirohi). Under the State Electricity regulations, the applicant is required to seek permission for the setting up of the captive power plant and enter into agreements with Power Transmission authorities for the transmission of the electricity generated at its solar power plant. So far the applicant company has made an application for approval from State Electricity Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... QUESTION POSED The applicant contends in support of the question so posed relying on the interpretation of various provisions as follows:- a. The applicant is in the business of manufacturing and sale of PP/HDPE Woven Sacks of various types from its manufacturing plant in Abu Road (Dist Sirohi). The said activities constitute 'business' in terms of section 2(17) of the CGST/ RGST Act. b. Section 16(1) of the CGST/ RGST Act provides the benefit of input tax credit to a taxable person of input tax charged on any supply of goods or services which are used or intended to be used in the course or furtherance of business of the taxable person. c. Section 2(59) defines inputs as being all goods including capital goods which are used or intended to be used by a supplier in the course of its business. Input service has been defined u/s 2(60) in a similar manner. d. Input tax has been defined as tax charged by a taxable person on goods and services supplied by him under the Integrated goods and service tax Act, 2017, CGST and RGST Act,2017 and such tax would be creditable in terms of section 2(63) read with section 49 of the said Acts. e. Section 16 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PP/HDPE Woven Sacks since the power generated from this plant is used to operate the PP/HDPE Woven Sacks manufacturing plant. B.QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT Whether the company is eligible to take input tax credit as 'inputs/capital goods' or 'input services' of the items enlisted in Annexure-B of this application in terms of Section 16 and 17 of the CGST/ RGST/ IGST Act? Additionally, whether the capital goods and inputs constitute plant and machinery of the Applicant which are used in the business of Manufacturing PP/HDPE Woven Sacks and hence not blocked input tax credit under section 17(5) of the CGST/ RGST/ IGST Act? C. PERSONAL HEARING In the matter personal hearing was granted to the applicant on 08.09.2021 at Room no. 2.11 NCRB, Statue Circle, Jaipur. Sh. Rohit Jain (CA) Authorised Representative of applicant appeared for PH. During the PH, he reiterated the submissions already made in the written application. She also made additional submission during the PH. D. COMMENTS OF THE JURISDICTIONAL OFFICER Comments received from the Superintendent, CGST Division, Abu Road vide letter dated 30.07.2021 are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is under the process of installation of a 620+ kW roof top Solar Power Generating Plant at its manufacturing unit for captive consumption of electricity so generated from the above plant for its PP/HDPE Woven Sacks manufacturing unit at Abu Road (Dist: Sirohi). 3. Before we delve deep to decide the case, it would be proper in the fitment of justice to discuss the relevant provisions of the statute which are as under- Section 16(1) and (2) of the CGST Act Eligibility and conditions for taking input tax credit. 16.(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49. be 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 in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the above provisions makes it clear that the restriction imposed herein is absolute in nature as it seeks to override Section 16(1) which entitles a registered taxpayer to avail credit on goods or services used or intended to be used in the course or furtherance of business. Irrespective of the fact that the goods or services are used for construction of immovable property which in turn will be used for conducting business, credit is not available; if the ownership of the property remains with the said person. The legislature, in his wisdom, think it proper to stop the flow of seamless credit once immovable property comes into existence and the ownership is fixed. 7. The applicant company intend to install Solar Power Generating Plant at the roof top of its own building set up. The applicant has not submitted full procedure of the installation of the said plant. Further, the applicant has just furnished the list and has not furnished any documentary proof to establish that the goods listed in the statement furnished have been capitalised in their books of accounts. Therefore, subject to the goods being capitalised in their books of account, the applicant may be eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. The terms apparatus, equipment and machinery has been examined as under:- Apparatus: A group of instruments, tools, etc. for a specific use Any complex instrument or machine. A collection of equipment used for a particular purpose. Is a compound instrument designed to carry out a specific function or for a particular use. Is a kind of word which as a generality extends widely and is not confined to things which are capable of being operated so as to generate some kind of result. Equipment: The machines tools, or instrument etc. necessary for a particular kind of work or activity. Machinery: In a generic sense, would include all appliances and instruments whereby energy or force is transmitted and transformed from one point to another. 11. In view of the above, Solar Power Generating Plant of the applicant qualify as 'plant and machinery' as it falls under machinery as discussed above and not covers under (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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