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Input tax credit of GST paid on goods and services used for laying of cross-country pipeline nearby river till the boundary wall of the Factory cannot be taken.

Input tax credit— Section 17(5) of CGST Act— In the instant case, the appellant has awarded contract for laying of Cross Country Pipeline System, including operation and maintenance for five years for NMDC to a consortium led by M/s Megha Engineering and Infrastructure Limited.

The appellant sought advance ruling to the points as under, before the Authority of Advance Ruling, Chhattisgarh:-

i. Whether input tax credit of GST paid on goods and services used for laying of cross-country pipeline nearby river till the boundary wall of the Factory can be taken by the Applicant?

ii. Whether input tax credit can be availed on Operation and Maintenance Services (O & M Services') obtained by the Applicant for the maintenance of the facility?

The advance Ruling authority had ruled that “the Appellant is not eligible to input tax credit of the GST paid on goods and services used for laying of cross-country pipeline and also on Operation and Maintenance Services for the maintenance of the said cross-country pipeline laid outside the factory premise .”

In terms of Section 2 (83) of CGST Act, 2017 “outward supply” in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business. No nexus whatsoever could be made of the “outward supply”, with the pipe lines laid outside the factory premises of Appellant for water supply on which ITC is being claimed. We also agree with the findings of the AAR that the provisions facilitating availment of Input Tax credit does not extend any blanket or unconditional permission for availment of credit on all items irrespective of its use, place of use and its role in making outward supply of goods or services or both, as appears to have been misconstrued by the Appellant. The Appeal filed by the Appellant is thus found to be devoid of any merits.

Held that— There is no merit in the appeal filed by the Appellant against the Advance Ruling order passed by the AAR, Chhattisgarh and accordingly the said order is upheld.

Input tax credit of GST paid on goods and services used for laying of cross-country pipeline nearby river till the boundary wall of the Factory cannot be taken.

The appellant sought advance ruling to the points as under, before the Authority of Advance Ruling, Chhattisgarh:-

i. Whether input tax credit of GST paid on goods and services used for laying of cross-country pipeline nearby river till the boundary wall of the Factory can be taken by the Applicant?

ii. Whether input tax credit can be availed on Operation and Maintenance Services (O & M Services') obtained by the Applicant for the maintenance of the facility?

Held that— There is no merit in the appeal filed by the Appellant against the Advance Ruling order passed by the AAR, Chhattisgarh and accordingly the said order is upheld.