In Re Mumbai Aviation Fule Farm Facility Private Limited (GST AAR Maharashtra)
Disallowed ITC on inputs used for pipelines laid outside factory premises being not covered within ‘plant and machinery’
The AAR, Maharashtra in the matter of M/s Mumbai Aviation Fuel Farm Facility Pvt. Ltd. [Order No. GST-ARA-126/2019-20/B-107 dated December 1, 2022] has ruled that, pipelines laid outside factory premises are not covered within term ‘plant and machinery’ as per Explanation to Section 17(5)(c) and 17(5)(d) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), and therefore the inputs used for construction of such pipeline outside factory are not eligible to Input Tax Credit (“ITC”).
Facts:
M/s Mumbai Aviation Fuel Farm Facility Pvt. Ltd. (“the Applicant”) is in the business of providing fuel infra services wherein the Automatic transmission Fluid (“ATF”) of oil a joint venture company is stored in the storage tank. The Applicant is setting up a Connector Pipeline for Fuel Hydrant System and the fuel is supplied to the Airlines. The Applicant also submitted that 10 per cent of total length of Connector Pipeline falls within their premises and rest of pipeline falls in area which is outside project sites.
The Applicant contended that the Connector Pipeline Laying and other associated works form the important part of Fuel Hydrant System and without this activity, the fuelling to the airlines will not take place. Therefore, the Applicant stated that the Connector Pipelines should be considered as the ‘plant and machinery’ integral to the facility serving the aircraft fuelling needs. Therefore, the Applicant should be entitled to claim ITC on the Goods and Services Tax (“GST”) paid on works done for entire Connector Pipeline.
Issue:
Whether the Applicant is entitled to seek ITC on the GST paid on goods and services used for construction of Connector Hydrant Pipeline?
Held:
The AAR, Maharashtra in Order No. GST-ARA-126/2019-20/B-107 held as under:
