Fact: M/s Maruti Ispat & Energy Private Limited, (“applicant”), is a private limited company, and manufacturers of steel and generation of power. The applicant submitted that they had DRI (direct reduced iron) i.e spong iron unit which involves in generation of power. They stated the nature of industry and product requires buying of large plant and machinery for installation and protection of this plant & machinery, they required to lay foundations with the construction of sheds.
Issues Involved: The following are the questions raised before the authority:
- Whether we are eligible to take GST input on Goods which are used for installation (Foundation) of plant and machinery?
- Whether we are eligible to take GST input services which are used for installation (Foundation) of plant and machinery?
- Whether we are eligible to take GST input on goods which are used for protection (by creating sheds) for plant and machinery?
- Whether we are eligible to take GST inputs on services which are used for protection (by creating shed) for plant and machinery?
Applicant contention of law: As per section 17(5)(C) & sec 17(5)(d) of CGST Act, 2017, there is no restriction to claim input, with respect to items related to plant & machinery. Further, they stated that structural support and civil structure are covered as per the explanation to the said provisions. They submitted that the digging process is done with regard to creation of foundation for specific installation of plant & machinery. They further highlighted that the word ‘support’ used in the explanation not only means support from base, but it also means support from all the ways i.e. creating sheds is to protect the plant & machinery. Further, they submitted the list of goods and services, which are to be used for their plant and machinery as input.
Held: The Hon’ble AAR of Andhra Pradesh vide ORDER NO. AAR/AP/14(GST)/2018 dated October 09, 2018 stated that the argument of the applicant to treat civil structures as structural support for plant and machinery is not tenable. The civil structures under consideration is squarely falls other civil structures which is excluded as per the explanation to the proviso of Section 17(5) of CGST Act, 2017. However, the application, on which clarification is sought for does not fall under the ambit of explanation to the proviso to the Section 17(5) of CGST/APGST Act, 2017. Hence, the applicant is not entitled to claim the input tax credit on the goods and services.