Page 90 - GSTL_27th August 2020_Vol 39_Part 4

416 GST LAW TIMES [ Vol. 39
such blocks is to ensure efficient and safe parking of automobiles of OEMs dur-
ing the contract period. If the cars are placed on the ordinary surface, it will be
subject to quicker wear & tear due to accumulation of water, dust etc. in the
wheels of such automobiles.
2.3 Such paver blocks are not to be permanently embedded on earth
and are capable of being removed as such without causing carnage to them for
reuse elsewhere. Moreover, the Lease Deed executed by the Company with its
land owners contains a clause to the effect that the Company shall remove such
Paver Blocks and take possession of the same on vacation of the premises. Hence
such Paver Blocks are to be construed as movable items.
2.4 Therefore, Applicant feels that it is eligible to avail input tax credit
in respect of taxes paid on purchase of such Paver Blocks laid on land being used
in the course of providing its output services to customers under the head stock-
yard management services.
2.5 Laying of Paver Blocks on land does not amount to construction of
immovable property u/s. 17(5)(c) of the CGST Act, 2017. Expenses on the Paver
Blocks are not capitalized as a part of immovable property (Land) in the appli-
cant’s books of account, hence the input credit on the same is not disallowable
u/s. 17(5)(d) r.w. explanation to Section 17(5) of CGST Act, 2017. Further, as per
explanation to Section 17(5)(c) & (d) of CGST Act, 2017, the prohibition to avail
input tax credit is applicable only in respect of expenditure which is capitalized
in the books of account. Hence, if the expenditure on purchase of paver block is
not capitalized & treated as revenue expenditure, there is no bar on availing
credit.
2.6 These paver blocks are laid on the land as movable property and
therefore, can be easily dismantled and re-laid at any other location. Paver blocks
are not fastened or permanently embedded on the earth as part of the land, ra-
ther they are only laid on the plain surface for parking of cars. Applicant compa-
ny has fully complied with the conditions contained in the Section 16(2) of CGST
Act for claiming of ITC.
2.7 Laying of the paver blocks cannot amount to works contract service
for construction of the immovable property under Section 17(5)(c) of CGST Act
since, the expression “construction” for the purpose of Section 17(5)(c) and
17(5)(d) includes reconstruction, renovation, addition or alteration or repairs to
the extent of capitalization to the said immovable property. In the case of the ap-
plicant the expenditure on the paver block has not been booked as revenue ex-
penditure in the books of account and therefore the same will not amount to con-
struction of immovable property. Accordingly, the input tax credit claimed by
the applicant cannot be hit by restriction placed u/s. 17(5)(c) of the CGST Act.
2.8 Applicant has discussed the definitions of ‘immovable property’
“movable property” and the term ‘goods’ and have submitted that the paver
blocks have been laid on the entire yard; Cars are parked on the paver block sur-
face. In rainy season no mud is formed on the paver block surface and helps car
to be removed from its slot easily; Bay marking can be done on the paver block
which helps to identify the car easily and the paver block surface gives a strong
grip for the movement of the cars. For placing the paver blocks, the base is pre-
pared with stone and dust which are rolled very firmly. Then coarse aggregate is
added on the surface and rolled. Grit powder of 30 mm is applied on the surface.
After levelling the paver blocks are placed on the surface manually. The paver

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