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The input tax credit is not eligible for the pipeline laid outside the factory premises and the foundations and structural support for such pipelines. 'Pile foundation' laid to the 'Project site' are not the 'foundation' included as 'Plant and Machinery' and therefore credit of GST Paid on such works contract for 'Pile foundation' are restricted as per Section 17(5) of the GST Act and not available as ITC.

Input tax credit- Section 17(5) of CGST Act- In the instant case, the subject appeal is filed against the order passed by the Tamil Nadu State Authority for Advance ruling on the application for advance ruling filed by the appellant.

Appellant had sought Advance Ruling on the following questions:

1. Whether the appellant is eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline which is intended for Unloading propane/Butane from the vessel/Jetty to the Terminal?

2. Whether the appellant is eligible for availment of input tax credit of GST paid on goods and services used for setting up refrigerated storage tank and input credit of goods and services used for foundation and structural support foundation tanks?

3. Whether the appellant is eligible for availment of input tax credit of GST paid on goods and services for setting up of Fire Water reservoir (tank and input credit on goods and services used for foundation and structural support for such reservoir?

AAR pronounced the following rulings:

1. The appellant is not eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline which is intended for unloading propane/butane from the vessel/Jetty to the Terminal.

2. The appellant is eligible for availment of input tax credit of GST paid on goods and services used for setting up refrigerated storage tank including the structural support thereon subject to the condition that the tanks are capitalized in their books of accounts as plant and machinery and not as immovable property and the appellant are not eligible to avail input credit of goods and services used for pile foundation.

3. The appellant is eligible for availment of input tax credit of GST paid on goods and services for setting up of fire water reservoir (tank) including the structural support thereon subject to the condition that the tanks are capitalized in their books of accounts as plant and machinery and not as immovable property and the appellant are not eligible to avail input credit of goods and services used for pile foundation.

The appellant has raised three issues for advance ruling before this appellate forum praying setting aside the orders of the Advance ruling authority, Tamil Nadu:-

1. Whether the applicant is eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline which is intended for Unloading propane/Butane from the vessel/Jetty to the Terminal?

2. Whether the applicant is eligible for availment of input tax credit of GST paid on goods and services used for foundation and structural support foundation tanks?

3. Whether the applicant is eligible for availment of input tax credit of GST paid on goods and services used for foundation and structural support for such reservoir?

The appellant submitted in the appeal that the transfer pipelines form part of the factory premises itself and therefore the credit of the taxes paid on laying of the pipelines is not restricted under Section 17 of the Central Goods and Services Tax Act, 2017.

Held that- There is no reason to interfere with the order of the Advance Ruling Authority relating to question No. 1. The subject appeal is disposed of accordingly.