The Authority for Advance Ruling(AAR), Rajasthan held that Input Tax Credit (ITC) is not available for supply of goods and services which are used for carrying out civil work and external development work.
The Applicant M/s Indag Rubber Limited manufactures pre-cured tread rubber, un-vulcanized rubber strip gum, universal spray cement and tire envelopes for the tire retreading industry. The Applicant has entered into an agreement with M/s Elcom Systems Pvt. Ltd for providing on lease a Maintenance Repair and Overhaul facility (MRO). That, the applicant further engaged M / s Akanksha Contracts Pvt. Ltd. for supplying various goods and services for setting up the MRO facility on its land.
The applicant contended that he is eligible to claim input tax credit (ITC) in respect of goods and services supplied by M/s Akanksha Contracts Pvt. for carrying out the activities of Civil Work and External Development Works for setting up of MRO facility which will be further leased to M/s Elcom Systems Pvt. Ltd.
The Authority comprising of J.P.Meena, Addl commissioner and Hemant Jain, Joint commissioner has ruled that the applicant is not eligible to claim credit of the GST charged by the vendor for supply of goods and services to it, which are used for carrying out the activities (Civil Work and External Developmental Works) for setting up of MR0 facility.
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