Inox is not entitled to avail and utilize ITC of GST charged by India Pistons Limited as the same is restricted under Section 17(5)(d) of the CGST Act, if such transaction is considered to be a supply.
Input tax credit— The applicant has sought Advance Ruling on:
Whether INOX (applicant) would be entitled to avail and utilize ITC of GST Charged by IPL if such transaction is considered to be a supply.
INOX has stated that IPL has sought an Advance Ruling on whether the transfer of leasehold rights in the part property amounts to supply and accordingly whether GST would be leviable on the consideration receivable from INOX.; that in the event where the authority rules that the transfer of leasehold rights to INOX is a supply and leviable to GST, they require to understand the admissibility of Input Tax Credit (ITC) of GST chargeable on such supply.
In the case at hand, it is seen that INOX had paid ‘consideration’ to IPL, for agreeing to part with their rights in the leasehold held by IPL, on the land required by the applicant. IPL had consented against such consideration and applied for withdrawing the leasehold held by them in favour of the applicant and on approval by SIPCOT, the applicant has entered into a lease agreement with SIPCOT on payment of necessary charges as required and acquired the leasehold rights for the land. Thus, it is evident that the amount paid is towards acquiring their entitlement to take on lease the land required for putting up a State of the art Ultra High Purity Cryogenic Liquid Medical and Industrial Oxygen Plant.
Held that—The services availed from IPL is in relation to acquiring lease of the land. By the specific exclusion in the definition of ‘Plant and Machinery’, as land stands excluded from ‘Plant and Machinery’, the services availed and utilized for acquiring such land on lease is restricted under Section 17(5)(d) of the CGST Act 2017, though the activity is in the course or furtherance of the business of the applicant and the credit of GST if payable on such supply is not eligible as credit to the applicant.
Inox is not entitled to avail and utilize ITC of GST charged by India Pistons Limited as the same is restricted under Section 17(5)(d) of the CGST Act, if such transaction is considered to be a supply.
Input tax credit— The applicant has sought Advance Ruling on:
Whether INOX (applicant) would be entitled to avail and utilize ITC of GST Charged by IPL if such transaction is considered to be a supply.
INOX has stated that IPL has sought an Advance Ruling on whether the transfer of leasehold rights in the part property amounts to supply and accordingly whether GST would be leviable on the consideration receivable from INOX.; that in the event where the authority rules that the transfer of leasehold rights to INOX is a supply and leviable to GST, they require to understand the admissibility of Input Tax Credit (ITC) of GST chargeable on such supply.
In the case at hand, it is seen that INOX had paid ‘consideration’ to IPL, for agreeing to part with their rights in the leasehold held by IPL, on the land required by the applicant. IPL had consented against such consideration and applied for withdrawing the leasehold held by them in favour of the applicant and on approval by SIPCOT, the applicant has entered into a lease agreement with SIPCOT on payment of necessary charges as required and acquired the leasehold rights for the land. Thus, it is evident that the amount paid is towards acquiring their entitlement to take on lease the land required for putting up a State of the art Ultra High Purity Cryogenic Liquid Medical and Industrial Oxygen Plant.
Held that—The services availed from IPL is in relation to acquiring lease of the land. By the specific exclusion in the definition of ‘Plant and Machinery’, as land stands excluded from ‘Plant and Machinery’, the services availed and utilized for acquiring such land on lease is restricted under Section 17(5)(d) of the CGST Act 2017, though the activity is in the course or furtherance of the business of the applicant and the credit of GST if payable on such supply is not eligible as credit to the applicant.