ABC is engineering having plant in Gujarat. Q:: Is ABC eligible for ITC on on building repair and Maintenance though expenses are not capitalized but expense under Section 17 of CGST. Any advance Ruling on this point? Q : In case of amount is paid under the head of `cartage` for transportation of goods for business purpose to a person not having issued consignment note. GST is applicable under RCM. Also whether services of labors towards loading /unloading is chargeable for GST.
ANSWER
FACTS OF THE CASE:
1. Eligibility of ITC on building repair and Maintenance though expenses are not
capitalized.
2. RCM on `cartage` for transportation of goods for bussiness purpose to a
person not having issued consignment note.
3. GST on services of labours towards loading /unloading.
LAW APPLICABLE:
Notification No. 12/2017 Central Tax (Rate)
| 24 | Heading 9967 or Heading 9985 |
Services by way of loading, unloading, packing, storage or warehousing of rice. | Nil | Nil |
| 54 | Heading 9986 | Services relating to cultivation of
plants and rearing of all life forms of animals, except the rearing of
horses, for food, fibre, fuel, raw material or other similar products or
agricultural produce by way of' ------------------------------------------------------------------------- (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; |
Nil | Nil |
SECTION 17 OF CGST ACT
(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;
(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.Explanation.''For the purposes of clauses (c) and (d), the expression 'construction' includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;
INTERPRETATION:
1. As per Section 17(5) goods or services or both received by a taxable person
for construction of an immovable property including when such goods or services
or both are used in the course or furtherance of business are restricted to the
extent of capitalization. Therefore ITC on repair and maintenance not
capitalized can be claimed.
2. RCM is applicable on services of GTA as per
Entry no. 1 of Notification No. 13/2017 Central Tax (Rate).
Where "Goods transport agency" means any person who provides service in
relation to transport of goods by road and issues consignment note, by whatever
name called.
"Consignment Note" is neither defined in the Act nor in the notification
no.12/2017-Central Tax (Rate). In terms of Explanation to Rule 4B of Service Tax
Rules, 1994 consignment note means a document, issued by a goods transport
agency against the receipt of goods for the purpose of transport of goods by
road in a goods carriage, which is serially numbered, and contains the name of
the consignor and consignee, registration number of the goods carriage in which
the goods are transported, details of the goods transported, details of the
place of origin and destination, person liable for paying service tax whether
consignor, consignee or the goods transport agency.
As there is no specified format for Consignment Note, therefore you are requested to please check whether there is any other document containing above mentioned details is issued by the Transport agency which can be considered as Consignment Note.
3. GST on services of loading and unloading of only rice or agricultural produce is exempt vide Notification No. 12/2017 Central Tax (Rate), otherwise services of loading and unloading is taxable under GST.
CONCLUSION:
1. ITC on repair and maintenance not capitalized can be claimed.
2. If any document containing relevant details is issued which play role of
Consignment note, then Transporter will be considered as GTA and RCM will be
applicable.
3. Services of loading and unloading of goods other than agricultural produce is
taxable under GST.
Suggestion:
Since you can claim ITC of RCM in same month you can avoid litigation by paying
tax on freight. (Reply dt.
15/11/2021)