In re Chemizon Private Limited (GST AAAR Uttarakhand)
The Appellate Authority for Advance Rulings, Uttarakhand considered an application filed by M/s Chemizone Private Limited seeking an advance ruling on whether it could claim refund or Input Tax Credit (ITC) of GST paid or payable on the upfront payment of lease amount made to M/s Eldeco Sidcul Industrial Park Limited (ESIPL) for securing an industrial plot on a long-term lease. The applicant proposed to construct a factory on the leased land for manufacturing activities.
The applicant stated that ESIPL, a joint venture Special Purpose Vehicle created by SIDCUL and Eldeco Industrial Park Limited, would charge GST on the upfront lease amount. The applicant sought a ruling on the admissibility of refund and ITC of the GST charged on such payment. The application was filed under Section 97(2)(d) of the CGST Act relating to admissibility of input tax credit.
During the personal hearing, the applicant reiterated that the industrial plot was being obtained from ESIPL, in which SIDCUL, a government entity, was a participant, and contended that ITC should therefore be allowed. The applicant also confirmed that the land would be used for constructing its factory.
The concerned State Tax Officer objected to the maintainability of the refund question, submitting that refund is governed by Section 54 of the CGST Act and does not fall within any of the matters specified in Section 97(2). It was further submitted that ITC on GST paid on the upfront lease amount was inadmissible under Section 17(5)(d) of the CGST Act because land is specifically excluded from the definition of “plant and machinery” and the leased land was intended for construction of an immovable property. Reliance was placed on the Gujarat Advance Ruling in M/s Agratas Energy Storage Solutions Pvt. Ltd.
