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SGST AAAR

GST – Gujarat AAAR – Section 16 and 17(5) of the CGST Act - Admissibility of input tax credit in respect of construction of LNG jetties on EPC Contract basis - Conditions for allowing input tax credit on goods and services for construction of foundation – whether LNG Jetties are in nature of ‘plant and machinery’ being foundation for equipment, apparatus, machinery for re-gasification to be installed thereon - HELD – the input tax credit on construction of foundation is allowed if the same is used for fixing on it the plant and machinery and further the said plant and machinery should be used for making outward supply of goods or services or both. The foundation or structural support needs to be exclusively for fixing the plant and machinery on it - Unloading Platform of Jetty in this case, can be treated as “land, building or any other civil structures”, which are excluded from the scope of the expression “plant and machinery”. Once a particular construction is cannot be treated as foundation or structural support of plant and machinery, such foundation and structural support is also to be treated as ‘plant and machinery’ by virtue of the statutory ‘Explanation’ to Section 17 of the CGST Act, 2017 - The appellant has sought a ruling that the entire LNG Jetties that is being constructed to be treated as foundation for plant machineries that will be installed on it - LNG Jetties are nothing but civil structures and civil structures are excluded from the definition of foundation and structural supports. The foundation that is allowed in the definition of plant and machinery is that which fixes the plant and machinery to the earth making it immovable - If certain portion of LNG jetties is used for directly fixing plant and machineries then it will not make jetties foundation for plant and machineries but they are only in the nature of civil structures. The appellant has also not produced any evidence to substantiate their claim that LNG jetties, which according to them are foundation of plant and machineries, will be used for outward supply of goods or services or both - the LNG Jetties being built by the appellant are not in the nature of ‘plant and machinery’ being foundation for equipment, apparatus, machinery for re-gasification to be installed thereon - the appellant is not eligible to avail input tax credit of GST paid on inputs, input services and capital goods procured for the purpose of building the LNG Jetties in terms of Section 16 of the CGST Act – AAR order is upheld and the appeal is dismissed
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