Page 183 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : P.K. MAHAPATRA 117
As per “Section 2(59) “Input” means any goods other than capital goods
used or intended to be used by a supplier in the course or furtherance of
business;
As per Section 2(19) “capital goods” means goods, the value of which is
capitalised in the books of account of the person claiming the input tax
credit and which are used or intended to be used in the course or further-
ance of business;
5.12 Section 17(5) of CGST Act, 2017 stipulates about the restrictions on
availment of input tax credit. Clause (c) and (d) of Section 17(5) provides for re-
striction of input tax credit in respect of goods and services used for construction
of immovable property (other than plant and machinery).
5.13 “Works contract” has been defined under Section 2(119) of the
CGST Act, 2017 as a contract for building, construction, fabrication, completion,
erection, installation, fitting out, improvement, modification, repair, mainte-
nance, renovation, alteration or commissioning 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. The above definition thus stipulates
only certain works performed on immovable property as works contract. Fur-
ther, it is only when there is involvement of transfer of property in goods that
would make the contract as works contract i.e. there must be a supply of goods
along with supply of service by the supplier (contractor).
5.14 “Construction” is defined under explanation to Section 17(5)(c) and
(d) for the purpose of these provisions to include re-construction, renovation,
additions or alterations or repairs, to the extent of capitalisation, to the said im-
movable property.
5.15 The relevant sub-clause under Section 17(5) of CGST Act, 2017
reads as under :
(5) Notwithstanding anything contained in sub-section (1) of section 16
and sub-section (1) of section 18, input tax credit shall not be available in re-
spect of the following, namely :-
……..
(c) Works contract services when supplied for construction of an
immovable property (other than plant and machinery) except 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 con-
struction 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 furtherance of business.
Explanation. - For the purposes of this Chapter and Chapter VI, the expres-
sion “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 excludes -
(i) land, building or any other civil structures;
(ii) Telecommunication towers; and
(iii) Pipelines laid outside the factory premises.
5.16 The listed works are works contract service on a immovable prop-
erty involving transfer of property in goods :
The provisions restrict credit of works contract services for works to be
performed on immovable property and also restrict the credit of construction
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