The Telangana Authority of Advance Ruling in the case observed and has allowed that the input tax credit, ITC being allowed for the construction of sheds using the prefabricated technology.
It has been observed by Sahil Inamdar that the Pre-Fabricated Sheds, PFS which are being constructed, thus, the immovable property, and the input tax credit is not admissible on the inward supplies as it may include the works contract services, for its construction, as the credit of such tax fall under the category of the blocked credits.
Further, it has also been observed by the S.V. Kasi Visweswara that the warehouse is erected to make use of the space created over the land on which it is built, with regards to the view of the law declared by the Supreme Court, the warehouses erected by the applicant using prefabricated structures wherein constituting immovable property and are not eligible for an input tax credit as stated under Section 17(5)(d) of the Central Goods And Service Tax, 2017.
Therefore, in the case, the applicant, M/s. Sanghi Enterprises is constructing a shed on leased land and the property is being constructed is a pre-fabricated shed system. Thus, it is also fixed by anchor bolts to a low RCC platform embedded in the ground, and it being only the civil structure and the rest of the structure, like columns, beams, rafters, wall sheets, roof sheds, etc., are all joined with one another by nuts and bolts and can be easily be dismantled and restructured at another location.
In the said case the issue raised is being weather the input tax credits are allowed for the construction of sheds using prefabricated technology.
It has been stated by the court that as per section 17(5)(d) of the Central Goods And Service Tax, 2017, the goods or services, or both, received by a taxable person for an immovable property shall not be amenable in order to claim an input tax credit.
It has also been noted by the AAR that even the temporary shelter such as a hut being an immovable property as long as it being the beneficial enjoyment of the land to which it is attach. Subsequently, applying for the said principle, the doors and shutters, which are generally being fixed to the door frame in the wall with screws and the nails, are considered to be an immovable property.
Further, it has been held by the AAR that as per section 17(5)(d) bars any taxpayer in order to avil the benefits of input tax credit in cases where the goods or services, or both, received by the said person are being used for the construction of an immovable property, thus, even if it being in the course or furtherance of the business.
M/s. Sanghi Enterprises the name of the Applicant.