Case Law Details
In re M/s. National Aluminium Company Limited (GST AAAR Odisha)
Whether the applicant is entitled to take input credit of services utilized for maintenance of Guest House, Transit House and Trainee Hostel?
The ruling of the AAR that the Appellant-1 is entitled to input tax credit of the tax paid on inward supply of input and input services for maintenance of guest house, transit house and trainee hotel is found to be not correct. As discussed in the previous paragraph, the provision of residential accommodation through transit house / trainee hostel is also a perquisite in favour of the employees and hence tax paid on inward supplies of goods and services for the transit house/trainee hostel cannot be allowed the benefit of input tax credit. The guest house of the Appellant-I is used for temporary accommodation of its employees as well as non employees. Thought the provision of guest house may not be treated as a perquisite, it cannot also be treated as an activity integrally related to the business of the Appellant-I. That means, the guest house service provided by the Appellant-I to its employees as well as non-employees cannot be treated as an activity in course or furtherance of its business. Hence, we are of the view that tax paid on inward supplies of goods and services in connection with the guest house cannot be allowed the benefit of input tax credit . To this extent, the appeal filed by the Appellant-II is sustainable and hence allowed.
Whether the applicant is entitled to input tax credit for the service utilized for plantation and gardening within the plant area including the mining area and the premises of other establishment like administrative building, guest house, transit house and training hostel?
The ruling of the AAR that services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments will qualify for input tax credit is found to be correct. Creation and maintenance of green area/zone inside plant/mining/office premises is a business necessity for controlling pollution as well as atmospheric temperature. It is also a requirement for preventing soil erosion. This is also mandated in various laws under which the Appellant-I conducts its business such as the Forest Conservation Act, the Environment Protection Act, etc. Therefore, such activities are integral to the business activity of the Appellant-I and hence can be treated as activities in course or furtherance of its business. To this extent, the appeal filed by the Appellant-11 is not sustainable and hence liable to be rejected.
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