2025-VIL-35-AAR
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SGST Advance Ruling Authority

GST – Gujarat AAR - Input Tax Credit, Plant and Machinery, Construction of Immovable Property, Section 17(5)(c) and 17(5)(d) of CGST Act 2017 - Applicant is setting up a new manufacturing plant for making HV/EHV cables - Applicant is procuring various inputs and input services for the construction of this concrete tower to support and erect the VCV line – Whether the applicant is eligible to avail the Input Tax Credit on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory - HELD - As per the Supreme Court judgment in M/s. Safari Retreats P Ltd, the Section 17(5)(d) of the CGST Act seeks to exclude from the ambit of ITC, goods or services received by a taxable person to construct an immovable property on his own account. This exception has two exceptions namely, (i) where the construction is of a "plant or machinery" and (ii) where the construction is not on the taxable person's own account - Supreme Court held that the expression "plant or machinery" has a different connotation than "plant and machinery" defined in the Explanation to Section 17. A building can also be treated as a "plant" under Section 17(5)(d), based on a functionality test - The construction of the concrete tower by the applicant is on its own account, as it is for the purpose of its manufacturing operations and not intended to be sold or given on lease/license. Therefore, the ITC on inputs and input services for such construction is not eligible under the first exception to Section 17(5)(d) - Further, the ITC is also not eligible under the second exception of Section 17(5)(d), as the concrete tower does not qualify as a "plant or machinery" based on the functionality test laid down by the Supreme Court - the applicant is not eligible to avail ITC on inputs and input services used for construction of the concrete tower to support and erect the VCV lines at its factory, in terms of Sections 17(5)(c) and 17(5)(d) of the CGST Act 2017 – Ordered accordingly
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