Case Law Details
In re Konkan LNG Private Limited (GST AAR Maharashtra)
Question :- Whether on the facts and circumstances of the case and as per the law, the applicant is not eligible to avail/utilize the input tax credit of the taxes paid in terms of section 16 read with section 17 of the MGST ACT / CGST ACT (CGST/ SGST / IGST ) to the supplier of goods/ services on the construction of the break water wall, which is an important and integral part of the existing jetty and very much required for the purpose of safety and longevity of the jetty and it imperative for making the existingletty as fully workable as an all-weather jetty and hence improves the operational efficiency of the applicant.
Applicant provides the service of regasification of LNG to the Ratnagiri Gas and Power Private Limited (RGPPL) for which LNG is supplied to them by transportation in ships which are berthed at the captive jetty. This LNG is then transferred to the applicant’s unit for re-gasification. The applicant is getting the breakwater constructed to ensure safety of the ships that are berthed at the jetty and also to allow the ships to enter the jetty at any point of time irrespective of the severity of the waves and tides. At present the ships are allowed only at certain times when the intensity of waves is less than a certain limit. After the construction of breakwater there would be no time restriction on ships entering the jetty.
The basic question before us is whether the breakwater that is being constructed for the applicant can be considered to be “Plant and Machinery”. The applicant contends that although the break water is an immovable property, it is covered under the term ” Plant or Machinery ” since `acropods’ which are used to construct the breakwater are interlocking devices fixed to the earth by foundation of the rock amour of different sizes are nothing but apparatus. We find that a breakwater is a barrier built out into the sea to protect a coast or harbour from the force of waves. Breakwaters reduce the intensity of wave action in inshore waters and thus reduces coastal erosion or provide safe harbourage to ships.
The applicant has agreed that the breakwater is an immovable property. To find whether they are eligible to avail ITC of tax paid on the construction of such breakwater we need to find whether the same can be considered to be ‘Plant and Machinery’.
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