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TMI Blog2022 (4) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... planation in Section 17 of the GST Act, 'Plant and Machinery' includes foundation and Structural Supports, however there is no definitive provision when such foundation or structural support simultaneously carries the load of a roof or function as side wall also. The applicant has not furnished any documentary proof for purchase of the Pre-cast/supports, as it is, for which the credit eligibility is sought. Also, the applicant has sought their eligibility to credit in respect of other capital goods like rails. Again the applicant has not furnished the details of 'other capital goods' and also the factual details as to whether 'rails' are procured by them per-se, or rails are also laid as a part of Works Contract services. The agreements and the copies of Invoices furnished in support of the questions raised by them shows that they have availed the services of Works Contract' of construction of Integrated Factory. The applicant procures services of Works Contract' of Construction of 'Integrated Factory Premises' designed to take the load of various 'Plant and Machinery' to be housed for operations. The incremental foundations made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions: Whether input tax credit of GST is admissible for supply of the following goods :- (a) steel, cement and other consumables (Annexure attached) to the extent of their actual usage in the execution of the works contract service when supplied for construction of immovable property, in the form of the factory which is an Integrated Factory building with Gantry Beam , which in turn used for mounting across the pre-cast concrete beams, poles and over which the crane would be operated; (b) Structures, Pre cast, reinforced concrete beams, poles etc. (purchased as it is) which are used as supports to mount and operate the crane over 10 metres from ground, as shown in the pictures attached; and (c) Other capital goods, like rails which are fixed over the concrete arms for smooth travel of the over-head crane The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The Applicant has stated that they are in the process of completing the establishment of an Integrated Fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the load of the moving crane for daily operation of WOEG, though these walls and beams are part of the factory. They are getting it done as Works Contract Service (WCS) and the invoice of steel, cement etc., are not in their name. It was stated that the entire WCS is being capitalized in their books of accounts. He further stated that the ruling is sought on whether they are eligible for ITC on the WCS service, rails installed on the beams which will become immovable property. The authorized representative stated that they claim credit proportionate to the incremental quantity required to support the construction towards the plant as the structure is not only a plant but also housing the plant. The indicative plan of the support structure; the invoice copies/Purchase orders/ Agreement for Works Contract Services for which ITC is sought for goods/services mentioned in the application; the details of whether credit has already been availed; details of returns filed with copies; certified accounts to establish the capitalization; working of the proportionate claim certified by Cost Accountant/Certified Engineer were asked to be furnished. 3.3 In the Written synopsis submitted dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the works contract service for the erection of the plant and machinery. Consequently, it does not fall within the exclusion of any other civil structures (emphasis added} in the Explanation under Section 17 of the CGST Act. For this submission, we place emphasis on the word used in the said explanation viz. other , which expression is crucial. It is obvious that the supplies (of goods and services) for civil structure towards construction of plant and machinery which require such foundation and structural support are excluded here in this Explanation by the word other . (h) Section 17(5)(c) (d) with the Explanation thereto make it amply clear that the construction of plant and machinery that, by definition, are fixed to earth by foundation or structural support is outside the list of blocked credits enumerated in Section 17(5). Therefore, the GST suffered by the applicant on the tax invoices for the inward supplies for such foundation and structural support for the gantry are eligible for input tax credit. They place reliance on the ratio of the decision of the Honble Supreme Court in the case of Jayaswal Neco Ltd. Vs Commissioner of Central Excise, Raipur [2015 (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to avail ITC on the civil constructions of an immovable property. 5.2 The State Jurisdiction Officer was requested vide this office letter Rc.Al/409/2021, dated 14.12.2021 to cause verification of the all the ITC availed in the returns GSTR 3B under the column SI. No.4A(5) from the months January 2021 to October 2021 for which they have filed the application for Advance Ruling to ascertain whether the credit, the eligibility of which is now sought has been availed before filing of this application. The State Jurisdiction Officer reported vide letter Ref.No. 1223/2021/A4 Dated : 01.03.2022 that the tax payer has availed an amount of ₹ 2,44,47,231.00 towards ITC for the invoices received for the Services rendered (HSN Code:9954) for the month of March-2021 and reflected the same in the Electronic Credit Ledger as per Monthly returns filed in GSTR 3B for the month of September-2021 filed on 20.10.2021 (Total ITC for the month of September-2021 is ₹ 2,45,09,694/-) Sl.No Trade/Legal name/ GSTIN Invoice number Invoice Date Inv Month Invoice Value(rs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 18 6421610.00 577944.90 577944.90 Total 12223615.63 12223615.63 Further it was reported that on verification of the Credit Ledger of the applicant revealed that they have not utilized ITC for the period of January-2021 to October-2021 for the Goods and Services for which advance ruling is sought for and they had enclosed the following documents for verification.- 1. Copy of Purchase Bills - 8 2. Copy of Ledger-2 3. Copy of Sep-2021 - GSTR-3B return-1 4. Copy of Credit Ledger-1 6.1 We have gone through the facts of the case, oral and written submissions made by the applicant as well as the Jurisdictional Officers and the applicable provision of the GST Laws in this regard. The applicant has stated that they are in the process of completing the establishment of an Integrated Factory Building, to manufacture and supply generators for wind operated electricity generators (WOEG) and that they suffer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rced concrete beams, poles etc., and also works contract service for construction of the factory building. They would not claim ITC for the GST suffered goods for the normal construction of the sidewalls and the roof for the factory and wanted to ascertain whether they are eligible to avail and utilize ITC on goods purchased for the civil engineering done at the enhanced levels for the erection of the gantry beams and eventual mounting and operation of the overhead cranes as they would be capitalizing in their books of accounts as plant and machinery and not as immovable property. Also they have claimed their eligibility to credit in respect of Structures, Pre-cast, Reinforced concrete beams, Poles, etc purchased as such, used as support to mount and operate the crane; and other capital goods like rails which are fixed over concrete arms. Thus, the issues to be decided before us is whether the credit of GST tax paid on the (1) Steel, Cement and other consumables used for reinforcing the foundation and structures is available to them in proportion to the increase in 'foundation/structural support' (2) Pre-casts, reinforcements, supports(procured as such) and (3) other capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9954 2,85,97,605 3 248/31.3.2021 Construction Work of Mezzanine Floor 9954 76,07,581 4 249/31.3.2021 Construction Work of Gantry Beam 9954 2,52,81,119 5 250/31.3.2021 Construction Work of Foundation Reinforcement 9954 73,58,637 6 251/31.3.2021 Construction Work of Steel Plates Additional Reinforcement 9954 30,49,319 7 252/31.3.2021 Pre-cast Wall Panel, Precast Retaining Wall Solid slabs and Cast Situ Works of Fire Reservice, Sump of Pond Area 9954 75,77,500 Perusal of the agreement and above invoices reveal that all pertain to Composite supply of Works Contract services of Construction falling under SAC 9954 and availed towards construction of factory premises to the applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation :- For the purposes of clauses (c) and (d), the expression -construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property 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. 8.2 The applicant claims the Input Tax Credit of the GST paid on the Steel, cement and other consumables used in prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory Premises' designed to take the load of various 'Plant and Machinery' to be housed for operations. The incremental foundations made is not the 'foundation with which the Plant and Machinery are fixed to earth', which is held as eligible along with the 'Plant and Machinery' as per the Explanation under Section 17 of the GST Act. Also, the applicant has not established that they individually procures steel, cement and other consumables for the works executed by their suppliers, thus the invoices for such goods have not been established to be in the name of the applicant. Therefore, the credit of steel, cement and other consumables even in proportion to the incremental volume of the earth foundation, side walls, beams, etc are not available as credit to the applicant. No ruling is extended on the 'Pre-cast, Reinforcements, supports' said to have been purchased as it is by the applicant and 'Other Capital goods' as the required facts of procurement and documentary substantiation is not made before us. 10. In view of the above, we rule as under: RULING 1. Input Tax Credit of GST paid on Steel, cement and other consumables are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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