Goods and Services Tax

Input Tax Credit of Structural Support to Plant and Machinery

Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 11-1-2019 – Introduction One of the core motives of implementation of GST by subsuming multiple indirect taxes was to make available seamless flow of credit to the assesses. However, section 17 of the CGST Act 2017 makes an exception to this objective. This article aims to throw light on the admissibility or non-admissibility of input tax credit of tax paid on structural support for plant and machinery. Legal Provision In order to understand the principles decided by AAR in Maruti Ispat and Energy Pvt Ltd 2018 (11) TMI 448 – AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH first lets understand the provision of law which reads as under:- Section 17(5) – Notwithstanding with anyt

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supply of works contract services; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant and 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 purpose of clauses (c) and (d), the expression construction includes re -construction, renovation, additions or alteration or repairs, to the extent of capitalization, to the said immovable 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 supports that are used for making outwards supply of goods

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and structure which may include civil construction which are part of the plant and machinery would be eligible for credit. Discussions and Findings The assessee contended that according to the nature of industry and product they required to buy large plant and machinery and for installation and protection of plant and machinery they also required to construct the sheds. It was argued that as per explanation reproduced above explaining the meaning of plant and machinery, the civil structure for protection of plant and machinery is structural support. It was further argued that the civil and structural support created by them involves digging process and with regard to creation of foundation for specific installation of plant and machinery a

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