GST ITC Not Available On ​​Goods And Services Used For Construction Of A Pipeline Laid Outside The Factory Premises: AAR

The Maharashtra Authority of Advance Ruling (AAR) has held that Input Tax Credit (ITC) is not available on goods and services used for the construction of a pipeline laid outside the factory premises.

The two-member bench of M. Rammohan Rao and T.R. Ramnani has observed that, as per the explanation to Section 17 of the GST Act, "plant and machinery" does not include a pipeline laid outside the factory premises.

The applicant, Mumbai Aviation Fuel Farm Facility Private Limited (MAFFPL), is in the business of providing fuel infrastructure services wherein the ATF of oil PSUs is stored in storage tanks. With the help of the Fuel Hydrant System, fuel is supplied to the airlines. The laying of connector pipelines and associated works is an important component of the fuel hydrant system.

The applicant desires to create a modern and efficient aviation fuel facility to cater to the needs of airlines operating from CSIA. MAFFFL has undertaken the development of the integrated

With the help of the Fuel Hydrant System, fuel is supplied to the airlines. The connector pipeline laying and associated works are an important part of the fuel hydrant system, and without this activity, the filing with the airlines will not take place. The applicant is setting up a connector pipeline for a fuel hydrant system at CSIA, Mumbai.

The applicant sought an advance ruling on the issue of whether, where inputs are consumed in the construction of immovable property outside MAFFFL's licensed premises, which are meant and intended to be for the provision of taxable output services, the input tax credit was available to the assessee.

The AAR has noted that the applicant has failed to establish how it is entitled to ITC in the presence of the express legal bar to claiming such ITC. Apart from the entitlement of ITC with respect to 90% of the pipeline outside their premises, there is no other issue involved in the present case.

The Authority held that the GST ITC is not available where inputs are consumed in the construction of immovable property outside MAFFFL's licensed premises.

Applicant's Name: M/s. Mumbai Aviation Fuel Farm Facility Pvt Ltd.

Date: 01/12/2022

Click Here To Read The Ruling