2025-VIL-59-AAR
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SGST Advance Ruling Authority

GST – Gujarat AAR - Eligibility to input tax credit on inputs and input services used in the execution of Works contract service when supplied for construction of an immovable property, Works Contract – For the expansion project applicants are required to install a Pre-Engineered Building Structure (PEB) - Eligibility of proportionate input tax credit on steel, cement and other consumables used in the execution of the works contract, installation and erection services of the PEB, and other capital goods like rails, electrification etc. installed for the operation of a crane - Whether proportionate ITC is admissible on the inputs and input services used in the execution of the works contract service for the construction of the PEB – HELD - the ITC on inputs and input services used for the construction of the immovable property, i.e. the PEB, is blocked under Section 17(5)(c) and (d) of the CGST Act, 2017. The PEB cannot be considered as 'plant and machinery' which is the only exception under these provisions - The Supreme Court in the case of M/s. Safari Retreats P Ltd laid down the law regarding the interpretation of Sections 17(5)(c) and (d). The explanation to Section 17(5) explicitly excludes civil structures from the definition of 'plant and machinery'. Therefore, the proportionate ITC on inputs and input services used for the construction of the PEB is not admissible - No proportionate ITC is admissible for the supply of steel, cement and other consumables used in the execution of the works contract for the construction of the PEB, installation and erection services of the PEB, and other capital goods like rails, electrification etc. installed for operation of the crane – Ordered accordingly - Whether proportionate ITC is admissible on the other capital goods like rails, electrification etc. installed for the smooth operation of the crane – HELD - Once these capital goods become embedded in the civil structure and form part of the immovable property, the ITC on the same is also blocked under Sections 17(5)(c) and (d) of the CGST Act.
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