ITC not allowable on air conditioning, cooling system, ventilation system because it is a blocked credit, AAR rules

The Gujarat Advance Rulings Authority (AAR) ruled that ITC was ineligible on the air conditioning, cooling system and ventilation system because it is a blocked credit.

The Plaintiff, M / s.Wago Private Limited is in the process of establishing its new factory in Vadodara, Gujarat and is purchasing various assets to install and commission them in its factory and, therefore, the Plaintiff has requested a ruling on the eligibility of the input tax credit. likewise within the meaning of the provisions of articles 16 and 17 of the CGST law of 2017.

The applicant requested the advance ruling on the eligibility of the input tax credit of the GST paid on the purchase of the foregoing, including the installation and commissioning service thereof, under the terms the provisions of Articles 16 and 17 of the CGST Law of 2017.

The coram of deputies Sanjay Saxena and Arun Richard considered that the “ventilation system installed in the building cannot be sold as is in the market and cannot be moved from one place to another as such for be erected on another site. It can only be moved after dismantling the said system, which can no longer be called “Ventilation system after it”. The “ventilation system” once installed and put into service in the building is transferred to the owner of the building and this involves the element of transfer of ownership. .

“We note that the work order awarded to Skai Air Control pvt. ltd. is for HVAC work and this also covers “ventilation system”. However, since the Applicant referred separately to the “ventilation system”, this is the subject of discussion. The ventilation system includes fresh air fans, exhaust fans, electrical panel, GI ducts, threaded rod with PU coating, hose clamp, piping bracket for copper pipe and drain pipe , a U-shaped clamp for drain hose, a screen flange and covers, a grid, an MS structure, regulators, suitable PU coated perforated GI cable trays with cover with the necessary structural supports, anchor fastener, pipe in PVC insulated, SITC of sheet metal ducts (factory made ducts) with accessories such as veins, flanges, guide ducts according to technical specifications, flexible duct for the equivalent connection of fresh air ducts and indoor units with AC cassette connection of fresh air, fabrication and construction of the steel structure for the support, etc. “Noted the AAR.

“The input tax credit is not eligible on the air conditioning and cooling system and the ventilation system, as it is a blocked credit falling under Article 17 (5) (c) of the CGST law, ”said the AAR.

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