Page 138 - GSTL_7th May 2020_Vol 36_Part 1

96 GST LAW TIMES [ Vol. 36
(4) Thus “bunds”/“crystallizers” are an indispensible part of the appa-
ratus used for manufacturing salt and bromine. It is in fact impossi-
ble to manufacture salt and bromine without bunds.
2.2 Applicants Understanding :
Input tax credit admissible in respect of any goods and services used in the
course or furtherance of business :
(1) The applicant may point out that input tax credit is admissible un-
der Section 16 of the GST Acts in respect of all goods and services
which are used or intended to be used in the course or furtherance
of business. Section 16(1) of the GST Acts which is relevant in this
regard reads as under :
“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 in-
tended to be used in the course or furtherance of business and the
said amount shall be credited to the electronic credit ledger of such
person.”
(2) It is respectfully submitted that the material used for constructing
bunds as well as the services availed for construction of bunds are
used in the course or furtherance of business and hence input tax
credit is admissible under Section 16(1) of the GST Acts.
None of the exclusions as contained in Section 17 of the GST Acts satisfied and
hence input tax credit is admissible :
2.3 Input tax credit is inadmissible in respect of some transactions as
stated in Section 17 of the GST Acts. It is respectfully submitted that “bunds”
does not fall under any of the restrictive clauses of Section 17 of the GST Acts and
hence input tax credit is admissible to the applicant.
“Bunds” are plant and machinery used for manufacturing salt and bromine and
hence clauses (c) and (d) of Section 17(5) are inapplicable
2.4 “Bunds” are immovable property. Hence clauses (c) and (d) of Sec-
tion 17(5) of the GST Acts which are relevant read as under :
“17(5) Notwithstanding anything contained in sub-section (1) of sec-
tion 16 and sub-section (1) of section 18, input tax credit shall not be availa-
ble in respect of the following, namely :-
(c) works contract services when supplied for construction of an
immovable property (other than plant and machinery) except
where it is an input service for further supply of works contract
service;
(d) goods or services or both received by a taxable person for con-
struction 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 reconstruction, renovation, additions or alterations
or repairs, to the extent of capitalization, to the said immovable property;”
2.5 Thus while input tax credit is not admissible in respect of works
contract services or any goods and services for construction of immovable prop-
GST LAW TIMES  7th May 2020  138