ITC of goods & services used for construction of a pipeline laid outside factory premises

In Re Mumbai Aviation Fule Farm Facility Private Limited (GST AAR Maharashtra)

Disallowed ITC on inputs used for pipelines laid outside factory premises being not covered within ‘plant and machinery’

The AAR, Maharashtra in the matter of M/s Mumbai Aviation Fuel Farm Facility Pvt. Ltd. [Order No. GST-ARA-126/2019-20/B-107 dated December 1, 2022] has ruled that, pipelines laid outside factory premises are not covered within term ‘plant and machinery’ as per Explanation to Section 17(5)(c) and 17(5)(d) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), and therefore the inputs used for construction of such pipeline outside factory are not eligible to Input Tax Credit (“ITC”).

Facts:

M/s Mumbai Aviation Fuel Farm Facility Pvt. Ltd. (“the Applicant”) is in the business of providing fuel infra services wherein the Automatic transmission Fluid (“ATF”) of oil a joint venture company is stored in the storage tank. The Applicant is setting up a Connector Pipeline for Fuel Hydrant System and the fuel is supplied to the Airlines. The Applicant also submitted that 10 per cent of total length of Connector Pipeline falls within their premises and rest of pipeline falls in area which is outside project sites.

Please become a Premium member. If you are already a Premium member, login here to access the full content.