The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Input Tax Credit (ITC) is not available on GST paid on laying of transfer pipeline, foundation and structural support for pipeline.
The applicant, SHV Energy Pvt. Ltd. has stated that their Tuticorin terminal is contemplating
expansion to increase the LPG capacity from 3,50,000 Metric Tons Per Annum (MTPA) to 12,00,000 MTPA. The expansion will involve suitable augmentation of existing facilities including Utilities and Offsite systems.
The applicant has sought the advance ruling on the issue whether the applicant is eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline for transporting Propane/Butane from Jetty to the Terminal.
The other issue raised was whether the applicant is eligible for availment of input tax credit of GST paid on goods and services for construction of refrigerated storage tank at Terminal.
Yet another issue on which advance ruling sought was whether the applicant is eligible for availment of input tax credit of GST paid on goods and services for construction of Fire Water reservoir which is a part of fire fighting system and whether the applicant is eligible for availment of input tax credit of GST paid on goods and services procured for construction of foundation/structural support through piling.
The coram of Kurinji Selvan and B. Sethilvelavan ruled that the applicant is not eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline which is intended for unloading Propane/Butane from the Vessel/Jetty to the Terminal.
“The applicant is eligible for availment of input tax credit of GST paid on goods and services used for setting up refrigerated storage tank including the structural support thereon as per the Purchase Order No. 4500405026 dated 11.03.2020 subject to the condition that the tanks are capitalized in their books of accounts as Plant and Machinery’ and not as Immovable Property’ and the applicant are not eligible to avail input credit of goods and services used for Pile foundation’ as per the Purchase Order No. 4500401679 dated 10.02.2020,” the AAR ruled.
The Authority further added that the applicant is eligible for availment of input tax credit of GST paid on goods and services for setting up of Fire Water reservoir(tank) including the structural support thereon as per the Purchase Order No. 4500405071 dated 11.03.2020 subject to the condition that the tanks are capitalized in their books of accounts as Plant and Machinery and not as Immovable Property and the applicant are not eligible to avail input credit of goods and services used for ‘ Pile foundation’ and input credit on goods and services used for such pile foundation.
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