The ITC shall be NOT be
available on the project development services like Programme management
consultancy, Marketing Consultancy, Land levelling and other related works,
Roads, Water, Electricity, & Drainage Infrastructure and other related
works for construction of an immovable property : AAR Gujarat
Applicant: M/s. Deendayal Port Trust
(erstwhile Kandla Port Trust)
Facts
of Case
The applicant has submitted that they have been directed by the ministry
of shipping to prepare a master plan comprising future projects and for
utilization of land resources with the endeavour for developing port based
smart city.
Deendayal Port trust is developing one of India's first Smart Industrial
Port City (SIPC) within Gandhidham-Kandla-Adipur Complex as part of the
Sagarmala project.
They will auction the land under the SIPC for 60 or
more years, for a consideration, in the form of one time upfront
premium,
liable for GST, under the category of Real Estate Service (HSN 9972).
The applicant has
requested for advance ruling as to whether the "Input Tax Credit"
shall be available on the following project development services like:-
1. Programme
management consultancy;
2. Marketing
Consultancy;
3. Land levelling
and other related works;
4. Roads;
5. Water,
electricity, & Drainage Infrastructure; and
6. Other related works for developing SIPC.
We observe that the applicant is engaged in development of port based smart city i.e. Smart Industrial Port City (SIPC) within Gandhidham-Kandla Adipur Complex. The said project development is nothing but construction of an immovable property and any project development services or goods or works contract used for construction of an immovable property shall attract the provisions of clauses (c) and (d) under sub-section (5) of Section 17 of the CGST Act, which specifically deny input tax credit in respect of works contract services or goods and services used for construction of an immovable property.
Therefore the said project development services of Programme management consultancy, Marketing Consultancy, Land levelling and other related works, Roads, Water, electricity, & Drainage Infrastructure and other related works for developing SIPC are not eligible for Input Tax Credit under the CGST Act, 2017.
The "Input Tax Credit" shall be
NOT be available under the CGST Act, 2017, on the project development services
like Programme management consultancy, Marketing Consultancy, Land levelling
and other related works, Roads, Water, Electricity, & Drainage
Infrastructure and other related works for development of SIPC i.e.
construction of an immovable property.
Source: AAR Gujarat
http://gstcouncil.gov.in/sites/default/files/ruling-new/GUJ_AAR_02_2020_11.03.2020_DPT.pdf
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