The Gujarat Authority of Advance Ruling (AAR) ruled that ITC not admissible on Air-conditioning, Cooling System, Ventilation System, as this is blocked credit.
The applicant, M/s.Wago Private Limited is in the process of establishing their new factory at Vadodara, Gujarat and are procuring various assets to install and commission them in their factory and therefore, the applicant sought Ruling on the admissibility of input tax credit on the same in terms of the provisions of Section 16 and 17 of the CGST Act, 2017.
The applicant has sought the advance ruling on admissibility of input tax credit of GST paid on the procurement of the above including the service of installation and commissioning of the same, in terms of the provisions of Section 16 and 17 of the CGST Act, 2017.
The coram of Members Sanjay Saxena and Arun Richard held that the ‘Ventilation system fitted in the building cannot be taken as such to the market for sale and cannot be shifted from one place to another as such to erect at another site. It can be shifted only after dismantling the said system which cannot be called ‘Ventilation system after it is. The ‘Ventilation system’ once installed and commissioned in the building is transferred to the building owner and this involves the element of transfer of property, thereby ‘Ventilation system supply merits to be classified as work contract supply as the system per se is an immovable property.
“We find that the work order awarded to Skai Air Control pvt. ltd. is for HVAC works and this covers the ‘Ventilation system’ too. However, since the applicant has raised the ‘Ventilation system’ separately, the same is taken up for discussion. The ventilation system comprises of fresh air fans, exhaust fans, electrical panel, GI ducting, threaded rod with PU coating, beam clamp, piping support for copper pipe and drain pipe, drain pipe U clamp, brid screen and cowls, grill, MS structure,regulators, suitable PU coated GI perforated cable trays with cover with necessary structural supports, Anchor Fastener, insulated PVC pipe, SITC of sheet metal ducts (factory fabricated ducts) with accessories like veins, flanges, guide vens as per technical specification, flexible duct for equivalent connecting fresh air ducting and cassette ac indoor units fresh air connection, fabrication and erecting structure steel for support etc. All the different parts of ‘Ventilation system’ after being fitted in the building lose their identity as individual goods and become “Ventilation system”,” the AAR noted.
“Input tax credit is not admissible on Air-conditioning and Cooling System and Ventilation System, as this is blocked credit falling under Section 17(5)(c) CGST Act,” the AAR ruled.
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