The Rajasthan Authority for Advance Ruling (AAR) has recently rejected the application of the applicant, Glensky Spirits Pvt. Ltd, for seeking an advance ruling as the question raised before the authority was vague.
The applicant raised the following question before the authority, in the application of advance ruling —” Whether the ITC of GST charged by the hired work contractors against the construction of Factory building including the foundation of machinery, rooms for chiller, generators, transformers and erection of electric poles, lying of internal roads, factory building, internal drainage, storage tank, laboratories etc on the construction services with or without material is available to them or not?”
The applicant submitted that all the above expenditure of construction relating to the foundation of the plant and machinery, a factory building and other constructions on which the plant will be established, comes under the definition of 17(5) of the Goods and Services Tax Act, 2017.
A Personal hearing was granted to the applicant when C.A. Rajendra Sharma appeared. He reiterated the submissions already made in the written application.
However, Sharma made a written submission dated 23.11.2022 after P.H. that the assessee company has started construction work at their Village – Baroondhan, Tehsil -Taleda, District – Bundi, Rajasthan for the setting up of fuel ethanol plant under ethanol blending program of Govt. of India; that all the requisite approvals have been received by the company and assessee
has started foundations and other structural work.
It was further submitted that construction work will include a foundation for laying the machinery, rooms for chillers, boilers, generators and transformers, erecting of electric poles, laying of Internal roads, factory building, internal drainage, laboratory, etc. So the Assessee is desirous of obtaining clarification regarding the eligibility of ITC on the amounts charged by the contractor for these services. He requested early disposal of the application.
The Authority observed that there are many types of construction services being received by the applicant and no detailed submission about construction work was made categorically in the application by the applicant. We find that availability of ITC on services depends on so many factors viz. type and nature of services, condition of services supplied etc.
It was also noted that the comments of the state officer were also not clear in this matter. The Authority members further added that the Applicant is going for setting up a plant without knowing the nature of construction categorically and it is not possible to give a ruling unless and until details are provided.
It was thus opined that “Availment of ITC without specific details cannot be generalized and ruling cannot be given in the absence of particular services.”
The application was thereby rejected by the authority of advance ruling, as the same was not maintainable.
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