No ITC can be Claimed on GST paid on Goods, Services, Operation and Maintenance Services of Cross-Country Pipeline outside Factory Premises: AAR [Read Order]

The Authority of Advance Ruling at Chhattisgarh has recently ruled that no Input Tax Credit (ITC) can be claimed on Goods and Services Tax (GST) paid for goods, services, operation and maintenance services of cross country pipelines outside factory premises.

M/s National Mineral Development Corporation (NMDC) Ltd. filed the application as per the provisions of the Chhattisgarh Goods & Services Tax Act, 2017 requesting an advance ruling on the admissibility of input tax credit of GST paid on goods and services used for laying of cross-country pipeline nearby river till the boundary wall of the facto and admissibility of input tax credit on Operation and Maintenance Services (O & M Services) obtained by the Applicant for the maintenance of the above facility.

The applicant submitted that the restriction applies only to long distance cross country pipelines. In their case, the pipeline is laid for a short distance of less than 50 kms from the factory.

It was also submitted that there is no restriction to take credit of input tax credit on annual operation and maintenance services for the pipeline as such services are eligible for input credit even on any immovable property.

It was observed by the Authority bench of Members Sonal K Mishra and Rajesh Kumar Singh that the pipelines laid outside the factory premises of the applicant are not plant and machinery and also that the said pipelines merit treatment as immovable property. Thus there exist no grounds for availment of Input tax credit on the taxes paid on annual operation and maintenance services of the aforesaid pipeline laid outside the factory premises.

It was thus ruled that, M/s NMDC, the applicant is not eligible to Input tax credit of GST paid on goods and services used for laying of cross-country pipe line outside the factory premises of the

Applicant.

It was also ruled that the applicant is not eligible to Input tax credit of CST paid on Operation and Maintenance Services (O&M services) for the maintenance of the said cross-country pipeline laid outside the factory premises of the applicant.

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