Input Tax Credit of Structural Support to Plant and Machinery
By: – CA Akash Phophalia
Goods and Services Tax – GST
Dated:- 11-1-2019<\/p>\n
Introduction
\nOne 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.
\nLegal Provision
\nIn 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:-
\n“Section 17(5) – Notwithstanding with anything contained in sub section (1) of section 16 and sub section (1) of section18, input tax credit shall not be available in respect of the following, namely:-
\n…&hel<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or alteration or repairs, to the extent of capitalization, to the said immovable property; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n eans support from base, but also support from all the ways, creating sheds is to protect the plant and machinery. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Input Tax Credit of Structural Support to Plant and MachineryBy: – CA Akash PhophaliaGoods and Services Tax – GSTDated:- 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 … Continue reading “Input Tax Credit of Structural Support to Plant and Machinery”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16146","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16146"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16146\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nExplanation.- 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 or services or both and includes such foundation and structural supports but excludes:
\n * Land, building or any other civil structures;
\n * Telecommunication towers, and
\n * Pipelines laid outside the factory premises.”
\nAccording to the provision cited above credit of civil structure is covered under blocked credits however, if the said civil structure is affixed as foundation or structural support to the plant and machinery then the input tax credit shall be admissible. Here, the definition of plant and machinery is also unique in including foundation and support which could be a works contract service for which credit is allowed but excludes 'any ot<\/p>\n
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\nConclusion
\nOn being perusal of the facts and photographs produced by the assessee and in view of the submission and evidences produced before the authority, it was decided by the authority that the civil structure cannot be treated as structural support for plant and machinery and hence the claim of the assessee not tenable resulting in non-admissibility of credit of tax paid.
\nInference
\nAlthough here is provision in law in favour of the assessee to avail of the input tax credit on structural supports to plant and machinery however, neither the law nor this decision had laid down any ratio of identification of admissible structural support. Let's how that the department come with some clarification and detailed ratio in this regard in the favour of the assessee.
\n–
\nCA Akash Phophalia
\n9799569294
\nca.akashphophalia@gmail.com
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