In re Mindrill Systems And Solutions Private Limited (GST AAR West Bengal)
The AAR, West Bengal, in the case of Mindrill Systems and Solutions Pvt. Ltd. [TS-287-AAR(WB)-2023-GST dated June 06, 2023] ruled that, Input Tax Credit (ITC) cannot be claimed on construction of immovable property which is capitalised in the books of account.
Facts:
M/S Mindrill Systems and Solutions Pvt. Ltd. (“the Applicant”) built a warehouse for which it has received inward supplies of goods and services, including work contract services.
Additionally, the Applicant has been paying tax on renting services because renting out the warehouse counts as a supply of service under GST.
The Applicant approached the AAR, to seek whether the ITC pertaining to construction of warehouse will be available to the Applicant.
On the ground that, the Applicant has let out the warehouse to another person for rent, thus it cannot be said that the Applicant has received the inward supplies for construction on his own account and secondly, the warehouse constructed by the Applicant cannot be regarded as immovable property since the warehouse is constructed by use of pre-engineered steel structures which can be detached and dismantled without any damage.
Issue:
Whether the Applicant is eligible to claim ITC of the inward supplies used in the construction of the warehouse?
Held:
The AAR, West Bengal in TS-287-AAR(WB)-2023-GST held as under:
