Page 169 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] IN RE : KANDLA PORT TRUST 127
(c) AMC for repair and maintenance of residential colony and hospitals
and school (other than new constructions, ITC for which is blocked
u/s. 15 of CGST Act, 2017).
(d) Telephones & Mobiles at residence of officers and at hospitals.
(e) Caretaking/housekeeping services at Guest House.
3.1 The Applicant further submitted that all the above expenses are in-
curred for maintaining its employees. The employees are backbone for any or-
ganization for providing output services to customers/clients.
3.2 The Applicant, vide their letter dated 24-7-2018, submitted their ad-
ditional submission wherein they, besides above facts, submitted that all the
above expenses are incurred by Deendayal Port Trust for maintaining its em-
ployees. The employees are backbone for any organization for providing output
services to customers/clients. It is not possible for any organization to do busi-
ness activities without employees. Accordingly, expenses are incurred in the
course and furtherance of business. Further, as directed during the personal
hearing held on 12-7-2018, they have submitted the copy of the Chapter V of Ma-
jor Port Trusts Act, 1963 (Object clause). They further submitted that as the
“Deendayal Port Trust” is carrying out its activities as per the provisions of the
Major Port Trusts Act, 1963 and as per the directions of Ministry of Shipping,
there is no any Memorandum and Article of Association like in case of other or-
ganizations.
4. The Jurisdictional Additional Commissioner, Central Goods and
Services Tax, Kutch (Gandhidham), vide their letter dated 12-4-2018 submitted
that the activity/services in respect of which an advance ruling has been sought
is an ongoing activity and as per record available and facts in notice, there are no
such cases pending/decided in GST regime. Further, he has submitted that Sec-
tion 16 of the CGST Act, 2017 which relates to eligibility and conditions for taking input
tax credit. Sub-section (1) of Section 16 of CGST Act, 2017 provides that “Every regis-
tered 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 electron-
ic credit ledger of such person.”
4.1 The Jurisdictional Additional Commissioner further submitted that
Section 17 of the CGST Act, 2017 which relates to Apportionment of Credit and
blocked credits and sub-section (1) of Section 17 of the CGST Act, 2017 provides
that “Where the goods or services or both are used by the registered person partly for the
purpose of any business and partly for other purposes, the amount of credit shall be re-
stricted to so much of the input tax as is attributable to the purposes of his business”.
4.2 As per clear reading of sub-section (1) of Section 16 and sub-section
(1) of Section 17 of the CGST Act, 2017, it is clear that a registered person is enti-
tled to take credit of input tax charged on 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 only.
4.3 In that case, the applicant is incurring expenses for providing com-
mon facilities to their employees within the residential colony where the quarter
has been given on nominal fees i.e. Hospitals, Sports Complex, Garden, Guest
House for official visitors and school for employee’s children and the same is not
related to furtherance of their business/output service i.e. port service.
GST LAW TIMES  7th May 2020  169