Page 95 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] IN RE : SUNDHARAMS PVT. LTD. 421
has also submitted that the paver blocks are fastened to land using interlocking
blocks and firm support of outer wall. Thus we find that the above-mentioned
decision of the Supreme Court can be made applicable in the present facts of the
matter to rule that paver blocks are to be considered as immovable property.
5.10 The applicant has submitted that “Even assuming without admitting
that permanently fitted Paver Blocks acquire the character of “Immovable Property”, the
claim of Appellant for input tax credit has to be allowed based on the decision of Orissa
High Court’s decision in Safari Retreats Pvt. Ltd. v. Chief Commissioner of CGST”.
5.10.1 Eligibility of Cenvat credit is governed by the provisions of
Chapter V of the CGST Act consisting of Sections 16 to 21. While Section 16 men-
tions the eligibility and conditions for taking input tax credit, Section 17 speaks
about apportionment of credit and blocked credit. Section 17(5) states that not-
withstanding anything contained in sub-section (1) of Section 16 and sub-section
(1) of Section 18, input tax credit shall not be available in certain cases. Thus in
the subject case it is imperative to find out whether the applicant is barred from
taking under Section 17(5) of the said Act.
5.10.2 We now reproduce the provisions of Section 17(5)(d) of the
CGST Act, which is as under :
“Notwithstanding anything contained in sub-section (I) of section 16 and
sub-section (1) of section 18, input tax credit shall not be available in respect
of goods or services or both received by a taxable person for construction of
an immovable property (other than plant or machinery) on his own account
including when such goods or services or both are used in the course or fur-
therance of business.”
5.10.3 Section 17(5)(d) bars a taxable person, in the subject case the ap-
plicant, from taking input tax credit for construction of immovable property (as
in the subject case), even when such goods or services or both are used in the
course or furtherance of business. Further, it is also seen from the submissions
that the immovable property in the subject case is neither plant nor machinery.
Thus we find that, Section 17(5)(d) provides that no ITC is available in respect of
any goods or services received by a taxable person for construction of an immov-
able property on his own account even if such inputs and input services are used
in the course and furtherance of business. In the instant case the applicant has
himself built the immovable property (parking) for which he has received goods
i.e. Paver Blocks. Therefore, as per Section 17(5)(d), no ITC is available on any
goods or services received by him for such construction and the same cannot be
claimed by him. Thus, the provisions of Section 17(5)(d) squarely applies in the
subject case and thus the applicant cannot avail input tax credit.
5.10.4 We find that, in the case of Sree Varalakshmi Mahaal LLP [2020 (32)
G.S.T.L. 597 (A.A.R. - GST - T.N.), the Advance Ruling Authority in Tamil Nadu,
while deciding application u/s. 97(2)(d) raised on the question “Whether the in-
put tax credit available on spent for construction of building materials can be
claimed and utilized to nullify the cascading effect of taxation?” has ruled that,
no input tax credit is available against any goods or services received by the ap-
plicant for construction of Marriage Hall on his own account even if used in the
course, or furtherance of his business of renting the place. The decision made in
the Sree Varalakshmi Mahaal LLP case is squarely applicable in the subject case
also.
5.10.5 The applicant has placed reliance on the judgment rendered by

GST LAW TIMES  27th August 2020  95