Case Law Details
In re Colourband Dyestuff P Ltd (GST AAR Gujarat)
Colourband Dyestuff P Ltd, a dye manufacturing company, has filed an application seeking an advance ruling on the eligibility of input tax credit (ITC) for the works contract services and materials used for the foundation and structural supports of their machinery. The applicant argues that the foundation and supports should be considered as part of the plant and machinery, which qualifies for ITC. The authority has considered the applicant’s submissions, along with relevant provisions of the CGST Act, and examined the photographs and certificate provided. The authority concludes that ITC is not available for works contract services and materials used for the construction of an immovable property, except for plant and machinery. However, the foundation and structural supports are explicitly included in the definition of plant and machinery, making them eligible for ITC. The ruling provides a detailed analysis of each item’s eligibility and clarifies the applicant’s claim. AAR Ruled as follows:-
[a] Works contract services (WCS) taken for structure on which machineries are fixed to earth by foundation and services taken for setting up plant i.e. MS steel structure is eligible subject to findings from para 19 onwards. Input Tax Credit (ITC) on structure/shed, erected on the left side of the Sand mill and spray dryer and the ITC on the structure/shed [i.e. roof and its supports] is not eligible. ITC in respect of foundation and support structure in respect of ETP [Effluent Treatment Plant] and Transformer is blocked in terms of Section 17(5) of the CGST Act, 2017.
[b] Steel [TMT bar] being procured by the applicant company and used while taking works contract services for making the said foundation to fix machineries to earth is eligible subject to findings recorded in para 19 onwards.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
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