Page 181 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : ORDNANCE FACTORY, BHANDARA 547
matter is similar to the facts and circumstances of the above cited Madras High
Court case of M/s. Rane TRW Steering System Ltd. v. The Commissioner of Central
Excise and Central Tax (supra), wherein the Appellant had contended on the
ground that the maintenance of the garden inside the factory premises is a man-
datory condition imposed by the Tamil Nadu Pollution Control Board for the
setting up and operation of the factory. In the present case also, it is mandated by
the Maharashtra Pollution Control Board to maintain the garden in the factory
premises of the Appellant. Further, the definition of the Input services provided
under Section 2(60) of the CGST Act, 2017 is comparatively wider than the earlier
definition of input services, which were provided under Rule 2(l) of the erstwhile
Cenvat Credit Rules, 2004, owing to the presence of the phrase “used or intended
to be used in the course or furtherance of business” under the present GST Law.
Further, the Department, in this case the respondent, has also not opposed to the
admissibility of the ITC in respect of the input services used by the Appellant in
the maintenance of the gardens inside the factory premises.
95. Hence, in view of the above discussions, it is reasonably concluded
that the Appellant is eligible to avail the ITC in respect of the input services used
to maintain the gardens inside the factory premises.
96. Now, we will discuss the issue of admissibility of ITC, raised by the
Appellant in question 2(b) of the advance ruling application, in respect of the
various input services like Maintenance and upkeep activities relating to gar-
dens, parks, playground, factory school for children of employees, hall for recre-
ational activities, residential quarter buildings of employees, roads, footpaths,
street lightings and other parts of estate area that are located outside the factory
premises but within the factory estate.
The Appellant’s submissions in this regard is as under :
As explained above, the term ‘factory estate’ has been used to describe
the area that falls within the boundaries of Ordnance Factory Bhandara
and are so controlled by Ordnance Factory Bhandara but such area is
outside the precincts of the area where factory & administrative building
is there. Such area comprises of establishments such as residential quar-
ters of employees of Ordnance Factory Bhandara & allied organisations,
market area, places for worship of God, shops that are given on lease
rental basis for commercial purposes, gardens, parks, playgrounds,
swimming pool, factory school for children of employees, half for recrea-
tional activities, footpaths, street lightings, inter-connected roads be-
tween all such establishments and factory premises and land that is cur-
rently not used for any purpose whatsoever.
The services of maintenance, upkeep, repair, housekeeping, cutting of
trees & grass, civil construction, hiring of manpower for attending school
bus, security services, garbage collection, sewage treatment, sweeping &
cleaning etc. procured in relation to such establishments within the fac-
tory estate should be considered to be an “input service” as per Section
2(60) of the CGST Act, 2017 and should also be considered to be “used or
intended to be used in the course or furtherance of business” as per Sec-
tion 16(1) of the CGST Act, 2017. Thus, Input Tax Credit should be avail-
able in respect of expenditure done on such services in so far as they are
not disallowed under any other provisions of the CGST Act, 2017. Let us
analyze each establishment one by one for admissibility of Input Tax
Credit :-
GST LAW TIMES  23rd July 2020  181