Input Tax Credit not admissible on installation of multi-layer car parking system: AAR Tamilnadu

 

The case discussed before the Authority for Advance Ruling (AAR) in Tamil Nadu revolves around the admissibility of Input Tax Credit (ITC) on a Rotary Parking System.

The applicant sought a ruling on whether they could claim Input Tax Credit (ITC) on a Rotary Parking System, which they intended to install on their premises for providing parking facilities to tenants and customers.

The applicant argued that since the parking system was detachable and solely intended for business purposes, it should be eligible for ITC under relevant sections of the GST Act. They provided invoices detailing the purchase of constituent parts of the parking system and argued that it should be considered separate from the building, hence will not fall under the category of works contract services.

The AAR Tamil Nadu HELD as follows-

• The rotary car parking has been decided to be built in the own land of the applicant, with a view to retain the existing tenants as well as to have full occupancy state.

• Further, it is not the case of the applicant to plan it to dismantle and move the structure to some other place. Hence, the intention of the applicant is to enjoy the benefit of the civil foundation as well as the car parking fastened to the foundation permanently, until the system ceases to exist or function.

• The car parking system falls within the meaning of Section 3(26), as envisaged under General Clauses Act, 1897 and as envisaged under Clause (c) of the Section 3 of the Transfer of property Act 1882 and thus Rotary Car Parking system is not a movable property as contested by the applicant

• Therefore, Input tax Credit is not admissible under section 17(5)(d) of CGST/TNGST Acts 2017 on the Rotary Parking System desired to be installed by the applicant, as discussed.

The copy of the order is as under: