In re Assistant Commissioner (M/s. Sikka Ports & Terminals Ltd) (GST AAAR Gujarat)
In the case of M/s. Sikka Ports & Terminals Ltd, the Gujarat Appellate Authority for Advance Ruling (AAAR) examined whether Input Tax Credit (ITC) is permissible under GST for services related to the operation, maintenance, and hiring of vessels. The authority analyzed the application of Section 17(5) of the Central Goods and Services Tax (CGST) Act, focusing on two key issues: services procured for vessel operation and maintenance and the hiring of vessels, specifically a Special Patrol Vehicle (SPV). The AAAR ruled that ITC for repair and maintenance of vessels, including Diving Support Vessels (DSV) and SPVs, is blocked under Section 17(5)(ab) since the vessels were not used for the specified purposes outlined in the law, such as transportation of goods or passengers.
For the hiring of SPVs, the AAAR noted that the services were not used for making outward taxable supplies of the same category or as part of a composite or mixed supply. The hiring of SPVs did not qualify for ITC under Section 17(5)(b)(i), which blocks credit unless vessels are used for specified purposes like passenger transport or goods movement. The authority found no evidence to support the respondent’s claims that the hiring services were integral to their taxable output services, such as port and terminal handling.
