Page 145 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] IN RE : SATYESH BRINECHEM PRIVATE LIMITED 103
“Non-taxable Supply” means a supply of goods or services or both which
is not leviable to tax under this Act or under the Integrated Goods & Services
Tax Act.
7.1.3 Exempt supply is defined under Section 2(47) of the CGST Act,
2017 (hereinafter referred to as “The Act”) as reproduced below -
“Exempt Supply” means supply of any goods or services or both
which attracts nil rated of tax or which may be wholly exempt under section
11, or under section 6 of the Integrated Goods and Services Tax Act, and in-
cludes Non-Taxable supply.
8. We further observe that Section 16(2) of the Integrated Goods and
Services Tax Act, 2017 (IGST Act for short) states that “subject to the provisions
of sub-section (5) of Section 17 of the Central Goods and Services Tax Act, 2017,
credit of input tax may be availed for making zero-rated supplies, notwithstand-
ing that such supply may be an exempt supply.” Whereas as per Section 2(47) of the
CGST Act, exempt supply includes nil rated supply and non-taxable supply.
9. Input tax credit is inadmissible in respect of some transactions as
stated in Section 17 of the GST Acts. Clauses (c) and (d) of Section 17(5) of the
GST Acts and the definition of “plant & machinery” as given in explanation to
Section 17 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;”
Further, the phrase “plant and machinery” has been defined in Explanation to Sec-
tion 17 of the GST Acts, which reads as under :
“Explanation. - For the purposes of this Chapter and Chapter VI, the
expression “plant and machinery” means apparatus, equipment and ma-
chinery 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.”
10. From the above, it clearly reveals that as per Section 16(2) of the
IGST Act, input tax credit is available on inputs and input services to make zero-
rated supplies (such supply may be an exempt supply), subject to the provisions
of sub-section (5) of Section 17 of CGST Act. As per Clauses (c) and (d) of Section
17(5) of the GST Acts, input tax credit is not admissible in respect of works con-

GST LAW TIMES  7th May 2020  145