Page 137 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] IN RE : P.K. MAHAPATRA 463
Court’s decision in Bharti Airtel case [2014 (35) S.T.R. 865
(Bom.)] and refused to follow the decision of the Delhi High
Court in the Vodafone case cited by the Appellant [2019 (27)
G.S.T.L. 481 (Del.)] when the correctness of the former deci-
sion was doubted by the Delhi High Court in the latter case?
(6) Whether the impugned order fails to appreciate the scope of
Section 16 of the CGST Act, 2017, which allows credit of taxes
on supply of goods or services or both used or intended in
the course or furtherance of one’s business?
(b) That, the impugned order concludes that the items in question are
nothing but immovable property and cannot be considered as
goods in any way for the simple reason that these are attached to
earth. The impugned order also places on the definitions of the term
“immovable property” under General Clauses Act, 1897 and Section
3 of the Transfer of Property Act, 1882 to explain the term “immov-
able property”. Certain case laws also were relied upon by the Au-
thority in support of its conclusion.
(c) That, on bare perusal of Section 17(5)(c) and (d) of the CGST Act,
2017, it is understandable that the test of movability/immovability
is immaterial to determine the eligibility of credit once the items in
question qualify as “plant and machinery”. Once the items in ques-
tion qualify as “plant and machinery”, they stand excluded from the
meaning of “immovable property”. As a matter of fact, under the
CGST Act, 2017, even if the items in question are attached to earth,
they will qualify as “plant and machinery”. The relevant extracts of
the Section 17(5)(c) and Section 17(5)(d) are extracted herewith for
ease of reference :-
17. (1)...
(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
available in respect of the following namely :-
(c) works contract services when supplied for construction of
an immovable property (other than plant and machinery) ex-
cept 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
construction of an immovable property (other than plant or ma-
chinery) on his own account including when such goods or ser-
vices or both are used in the course or furtherance of business.
Explanation. - For the purposes of clauses (c) and (d), the expression
“construction” includes re-construction, renovation, additions or al-
terations or repairs, to the extent of capitalization, to the said im-
movable property;
…………
Explanation. - For the purposes of this Chapter and Chapter VI, the
expression “plant and machinery” means apparatus, equipment,
and machinery 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 ex-
cludes -
GST LAW TIMES  27th August 2020  137