In re Swan LNG Pvt. Ltd. (GST AAR Gujarat)
Question-1: Whether in terms of Section 17 of the CGST Act, 2017 read with GGST Act, 2017, the LNG jetties proposed to be built by the applicant can be said to be covered within expression ‘plant and machinery’ as foundation to equipment, apparatus, machinery to be installed on it?
Answer: The LNG jetties proposed to be built by the applicant are not covered within the expression ‘plant and machinery’ as foundation to equipment, apparatus, machinery to be installed on it in terms of Section 17 of the CGST Act, 2017 read with GGST Act, 2017 for the reasons discussed hereinabove.
Question-2: Whether as per Section 16 read with Section 17 of the said Acts, the applicant can accordingly avail ‘input tax credit’ of GST paid on inputs, input services as well as capital goods procured for the purpose of building the LNG jetties?
Answer: The applicant cannot avail ‘input tax credit’ of GST paid on inputs, input services as well as capital goods procured for the purpose of building the LNG jetties in terms of Section 16 read with Section 17 of the CGST Act, 2017 read with GGST Act, 2017 for the reasons discussed hereinabove.
Read AAAR :- ITC not eligible on capital goods procured for building LNG Jetties
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, (Gujarat)
The applicant M/s. Swan LNG Pvt. Ltd., has submitted that they are a private limited company incorporated in India and a subsidiary of Swan Energy Limited. They have submitted that they have entered into a Concession Agreement dated 18th October, 2017 with the Gujarat Maritime Board (‘GMB’) to, inter-alia, implement the development, construction, operation and maintenance of Liquefied Natural Gas (‘LNG’) Port with a Floating Storage and Regasification Unit (‘FSRU’) facility in Jafrabad, Gujarat under the Build, own, Operate and transfer (‘BOOT’) basis. As part of developing the LNG Port and FSRU facility, the applicant would be developing an Import Terminal for FSRU near the village Bhankodar near Jafrabad, Gujarat for an output of 10 MMTPA. After development of the said Import Terminal, it would be providing LNG regasification services to prospective customers.
2. The applicant has submitted that as per the Concession Agreement, the applicant is required to develop the LNG infrastructure for the purpose of regasification of LNG, and FSRU, which would be installed in Harbor Area of the Port facility; that presently, as on the date of filing of this Application, the Port infrastructure and the FSRU is under development stage and has not yet been commissioned/operationalized and is expected that this facility would be commissioned/operationalized by mid 2020; that the proposed LNG Port Infrastructure consists of building two Jetties (referred to as ‘Jetty 1’ & ‘Jetty 2’), as per the development plan and these LNG Jetties which are proposed to be developed are completely unique in terms of their purpose and use as compared to the purpose and use of ‘Jetty’ as understood in a commercial parlance and shipping industry parlance; that these Jetties are essentially and primarily proposed to be used as foundation for the plant and machinery, that is, loading and unloading equipment and other related equipment which will be used for the purpose of loading, unloading, and transporting LNG; that the LNG Jetties proposed to be built as foundation of plant and machinery shall consist of the following:
