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SGST AAAR

GST – Tamil Nadu AAAR - Eligibility of Input Tax Credit on acquisition of leasehold rights - Appellant acquired leasehold rights property from M/s. India Pistons Limited (IPL) for the remainder period (72 years) of leasehold rights. Appellant sought an advance ruling on entitlement to avail ITC of GST charged by IPL for the transaction - The AAR ruled that the Appellant (an applicant at that stage) is not entitled to avail and utilize ITC of GST charged by IPL as the same is restricted under Section 17(5)(d) of the CGST Act 2017 - Whether the appellant is entitled to avail and utilize ITC of GST charged by IPL for the transaction - HELD - The service received by the appellant towards acquisition of the leasehold rights is for 'construction' of the manufacturing facility, which is an immovable property, on its own account. Further, the manufacturing facility does not qualify as 'plant and machinery' as defined under the Explanation to Section 17 of the Act, as the overall installation cannot be treated as an 'apparatus, equipment or machinery' under the statutory definition - The exclusion of 'land, building or any other civil structures' from the definition of 'plant and machinery' implies that the ITC on the acquisition of leasehold rights is blocked under Section 17(5)(d) - The Appellant is not entitled to avail and utilize ITC of GST charged by IPL, as the same is restricted under Section 17(5)(d) of the CGST Act, 2017, if such transaction is considered to be a supply – Ordered accordingly
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