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Case Law Details

Case Name : In re NMDC Limited (GST AAAR Chhattisgarh)
Appeal Number : Advance Ruling No. CG/AAAR/ 03/2019-20
Date of Judgement/Order : 03/09/2019
Related Assessment Year :
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In re NMDC Limited (GST AAAR Chhattisgarh)

In the instant case, Structures/towers meant for Lighting for Plant Road, Boundary Wall and Watch tower can in no way be related to the outward supply of goods. As per Section 2(83) of CGST Act, 2017 “outward supply” in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, license, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business. Not acceding, but if assuming for the sake of discussion that these are apparatus/ equipment as contended by the Appellant then too it is implausible and far-fetched to imagine that these items which eventually Boundary wall and watchtower, are used for supply the term “used for” in the definition for plant and machinery, there should he a nexus between the impugned items on which ITC is being claimed and `outward supply”. In the present case the project of lighting of plant Road, Boundary wall and watchtower will render such nexus tenuous.

We affirm with the findings by the AAR that “the provisions facilitating availment of Input Tax credit does not extend any blanket or unconditional permission for availment of credit on all items irrespective of its use, place of use and its role in making outward supply of goods or services or both, as appears to have been misconstrued by the applicant. These towers, boundary and watch tower by their very nature appears to be nothing but independent civil structures, having no relationship whatsoever with outward supply”.

Citing reference of the case of Vodafone Mobile Services Limited Vs Commissioner Of Service Tax (Delhi High Court) dated 31.10.2018, the Appellant’s contention was that Credit of taxes paid on telecom towers have been allowed. In this context, it is seen that the case of M/s Vodafone Mobile Services Ltd. and other such providers of Telecommunication service providers are distinct and distinguishable from the facts and circumstances of the case in hand, in as much as in the cited case such towers are being used for providing the “output service”, viz. Telecommunication service, whereas in the instant case there is no nexus between the impugned items required for the said project of lighting of plant Road, Boundary wall and watchtower on which ITC is being claimed and the “outward supply” of the Appellant. In the cited Vodafone case, ‘Capital goods’ are the items under specified Tariff headings or parts, components, spares or accessories thereof and these are ‘Base Transmission System’ (BTS), which enables the telecom company to transmit mobile signals and thereby render telecom services. Appellant have also given reference to other case laws as well all of which in view of the above stated reasons are distinct and and distinguishable from the issue in hand. As already discussed it is of utmost  importance for availing credit, that the nexus test gets established. Thus, the cited case laws are not applicable to the instant case.

FULL TEXT OF ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING, CHHATTISGARH

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