Disallowed ITC on inputs used for pipelines laid outside factory premises being not covered within plant and machinery

Last updated: 04 January 2023

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The Maharashtra Authority for Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) is not available for inputs used in constructing pipelines laid outside factory premises. The AAR determined that such pipelines do not qualify as 'plant and machinery' under the CGST Act. Consequently, the company involved in aviation fuel services cannot claim ITC on the goods and services used for the portion of the pipeline situated outside its premises.

Court :
AAR, Maharashtra

Brief :
The AAR, Maharashtra in the matter of M/s Mumbai Aviation Fuel Farm Facility Pvt. Ltd. [Order No. GST-ARA-126/2019-20/B-107 dated December 1, 2022] has ruled that, pipelines laid outside factory premises are not covered within term 'plant and machinery' as per Explanation to Section 17(5)(c) and 17(5)(d) of the Central Goods and Services Tax Act, 2017 ("the CGST Act"), and therefore the inputs used for construction of such pipeline outside factory are not eligible to Input Tax Credit ("ITC").

Citation :
Order No. GST-ARA-126/2019-20/B-107 dated December 1, 2022

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