The Maharashtra Authority of Advance Ruling (AAR) ruled that Input Tax Credit (ITC) cannot be claimed on the purchase of paver blocks laid on land.
The Applicant, M/s Sundharams Private Limited, is engaged in providing warehousing, storage, and support services to the Original Equipment Manufacturers (OEMs) of the automobile industry, transports cars tractors using its fleet of car carrier vehicles. During the course of these services, the cars are stored in the applicant’s stockyard prior to their transit to the respective car dealers. On storage rentals of these vehicles, the applicant Company has been collecting and paying applicable GST.
The applicant has purchased tax paid Paver Blocks which are laid in the parking area of the land without any attachment to the cart. The object of laying such blocks is to ensure efficient and safe parking of automobiles of OEMs during the contract period. If the cars are placed on the ordinary surface, it will be subject to quicker wear & tear due to the accumulation of water, dust eye, in the wheels of such automobiles.
Such paver blocks are not to be permanently embedded on earth and are capable of being removed as such without causing damage to them for reuse elsewhere. Moreover, the Lease Deed executed by the Company with its landowners contains a clause to the effect that the Company shall remove such Paver Blocks and take possession of the same on the vacation of the premises. Hence such Paver Blocks are to be construed as moveable items.
The applicant sought the advance ruling on the issue of whether the applicant is entitled to avail Input tax credit under CGST in respect of taxes to be paid on its purchase of Paver Blocks laid on the land.
The Authority consists of members A.A. Chahure and P. Vinitha Shekhar ruled that the subject, paver blocks would qualify as immovable property and therefore Applicant cannot avail ITC in the subject case as per Section 17(5) (d) of the CGST Act, 2017.
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