In re Arthanarisamy Senthil Maharaj (GST AAR Tamilnadu)
The case discussed before the Authority for Advance Ruling (AAR) in Tamil Nadu revolves around the admissibility of Input Tax Credit (ITC) on a Rotary Parking System. Let’s break down the key points and findings.
The applicant sought a ruling on whether they could claim Input Tax Credit (ITC) on a Rotary Parking System, which they intended to install on their premises for providing parking facilities to tenants and customers.
The applicant argued that since the parking system was detachable and solely intended for business purposes, it should be eligible for ITC under relevant sections of the GST Act.
They provided invoices detailing the purchase of constituent parts of the parking system and argued that it should be considered separate from the building, hence not falling under the category of works contract services.
However, the AAR found that the Rotary Parking System, though detachable, required a specific foundation and steel structure for installation, making it akin to an immovable property as per legal definitions. The AAR cited legal precedents and definitions from acts such as the General Clauses Act and Transfer of Property Act to support their decision.
Furthermore, the AAR examined whether the parking system could be classified as plant and machinery, which would make it eligible for ITC. They concluded that since the primary function of the system was to provide parking space and not manufacturing or service provision, it fell under the exclusion clause of plant and machinery.
