INDAG RUBBER WINS ENTRY TAX RELIEF – RETREADED TYRES EXEMPTED, RAW MATERIAL REFUND ORDERED
RAJASTHAN APPELLATE AUTHORITY FOR ADVANCE RULING GOODS AND SERVICES TAX
Before the Bench of
1. Sh. Pramod Kumar Singh, Member (Central Tax)
2. Sh. Abhishek Bhagotia, Member (State Tax)
Case Title : M/s Indag Rubber Limited
(GST AAAR RAJASTHAN)
Appeal No. RAJ/AAAR/APP/05/2020-21
Advance Ruling No. RAJ/AAR/2019-20/23 dated 21.10.2019
ORDER NO. RAJ/AAAR/05/2020-21
Date of Judgment/ Order- 29th January 2021
BRIEF FACTS OF THE CASE
Para No. 3. M/s Indag Rubber Limited, SP 86-88, Industrial Area Bhiwadi, Bhiwad Alwar, Rajasthan 301019 is holder of GST Registration No. 08AAACI0868D1ZS ( hereinafter refer as Appellant). The Appellant inter-alia manufactures precured tread rubber, un-vulcanized rubber strip gum, universal spray cement and tyre envelopes for the tyre retreading industry. M/s Elcom Systems Pvt. Ltd (hereinafter referred to as “Elcom”) is a private limited company incorporated in India and is engaged in the business of repair, maintenance, overhaul, upgrade and modernization of Unmanned Aerial Vehicles (UAV). Elcom has approached Appellant for taking on lease a Maintenance Repair and Overhaul facility (hereinafter referred to as “MRO”). According to the agreement between the Appellant and Elcom, the Appellant will construct MRO facility at Bhiwadi as per the specifications given by Elcom. The said MRO facility will thereafter be given on lease to Elcom by the Appellant. Elcom will install its equipment’s in the MRO facility and will render MRO services to Israel Aerospace Industries (IAI in short). The said sub-lease for the MRO facility is for the period of 9 years and 6 months. In case of early termination of this sub-lease deed, Elcom shall ensure that IAI makes its best efforts for alternative arrangements to continue operations at the MRO Centre for remainder of the 9-year lock in period, so that the appellant shall not suffer loss. In such case, the Elcom shall continue to make monthly payment to the Appellant of the lease rentals and other costs and expenses which are payable by Elcom under this sub-lease deed, until the Appellant enters in a fresh deed with new tenant for the unexpired term.
3.1 Appellant procures inputs and input services for undertaking work with respect to point no. iii. to vi. In respect of these inputs and input services, input tax credit is being availed by the Appellant.
Para No. 5. Authority for Advance Ruling, Rajasthan has observed that the provisions of Section 17(5)(d) of CGST Act, 2017 is clear that if the goods or services are used for the construction of an immovable property, the ITC shall not be available irrespective of use of the said property and issued Ruling that the applicant is not eligible to claim credit of the GST charged by vendor for supply of goods and services to it, which are used for carrying out the activities (Civil Work and External Developmental works for setting up of MRO facility.
ORDER
Para No. 9. . In view of the above discussion and findings, we hold that the appeal filed by the appellant has no merit and rejected accordingly.
