Page 134 - GSTL_27th August 2020_Vol 39_Part 4

460 GST LAW TIMES [ Vol. 39
consisting of civil structures as cannot be said to be used by assessee for mak-
ing outward supply of goods or services or both, being essential ingredient for
being termed as “Plant and Machinery” - Structures/towers meant for lighting
for plant road, boundary wall and watchtower can in no way be related to
outward supply of goods - No nexus between project and outward supply -
Finding of Authority for Advance Ruling that “provisions facilitating avail-
ment of Input Tax Credit does not extend any blanket or unconditional per-
mission for availment of credit on all items irrespective of its use, place of use
and its role in making outward supply of goods or services or both, as appears
to have been misconstrued by the applicant - These towers, boundary and
watchtower by their very nature appears to be nothing but independent civil
structures, having no relationship whatsoever with outward supply” affirmed
- Assessee not entitled for input tax credit on inward supplies for he said activ-
ities of design & engineering, supply of plant and equipment and erection of
plant and equipment for lighting of plant road, boundary and watchtower -
Sections 2(19), 2(59), 2(83), 2(119), 16 and 17 of Central Goods and Services Tax
Act, 2017 - Section 3(26) of General Clauses Act, 1897. - Input Tax Credit provi-
sions thus restrict ITC credit of Works Contract services for works to be performed on
immovable property and also restrict the credit of construction related activity of immov-
able property even when construction activity do not fall into the scope of works contract.
However, works contract and construction activity is eligible for Input Tax Credit if done
in respect of plant and machinery. Plant and machinery has been specifically defined as
any equipment, apparatus attached to earth by foundation or structural support used for
supply of goods or services. Plant and machinery to specifically exclude telecom towers,
pipelines, etc. As per the definition of works contract, the works contract inter alia in-
clude construction of any immovable property wherein transfer of property in goods
(whether as goods or in some other form) is involved in the execution of such contract.
On the other hand Construction has been defined under explanation to Sections 17(5)(c)
and 17(5)(d) as reconstruction, repairs, renovation, additions, etc. to an immovable prop-
erty the cost of such work is capitalised. Thus, Construction activity will not qualify as
works contract if there is no transfer of property in goods involved, i.e., the contractor is
supplying service only without any supply of goods. Works contract may or may not be a
construction. [paras 5.12, 6.5, 6.6, 6.10, 7.4, 7.6. 7.7]
Precedent - Advance Ruling - Advance Ruling pronounced by Authori-
ty or Appellate Authority binding only on the applicant who had sought it in
respect of any matter - Sections 97 and 103 of Central Goods and Services Tax
Act, 2017. [para 8.2]
Appeal rejected
CASES CITED
Bharti Airtel Ltd. v. Commissioner — 2014 (35) S.T.R. 865 (Bom.) — Referred ................................ [Para 3]
Collector v. Solaris Chemtech Ltd. — 2007 (214) E.L.T. 481 (S.C.) — Referred ................................. [Para 3]
Commissioner v. India Cements Ltd. — 2017 (3) G.S.T.L. 144 (Tribunal)
— Distinguished .................................................................................................................... [Paras 3, 8.1]
Commissioner v. Jawahar Mills Ltd. — 2001 (132) E.L.T. 3 (S.C.) — Distinguished ............. [Paras 3, 8.1]
Commissioner v. Maris Spinners Ltd. — 2008 (223) E.L.T. 163 (Mad.) — Distinguished .... [Paras 3, 8.1]
Commissioner v. Rupa and Co. Ltd. — 2004 (170) E.L.T. 129 (S.C.) — Referred .............................. [Para 3]
Commissioner v. Solid and Correct Engineering Works
— 2010 (252) E.L.T. 481 (S.C.) — Referred .................................................................................... [Para 3]
Duncans Industries Ltd. v. State of U.P. — Order dated 3-12-1999 of Supreme Court
— Relied on .................................................................................................................................... [Para 6.9]
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