AAAR Upheld AAR Ruling Which Denied ITC on Air Conditioning, Cooling, and Ventilation Systems

Case Details: Appellate Authority for Advance Ruling, Ahmedabad Wago (P.) Ltd., In re - [2024] 163 taxmann.com 395 (AAAR-GUJARAT)

Judiciary and Counsel Details

• Samir Vakil & B.V. Siva Naga Kumari, Member
• Chitresh Gupta & R. Sharma for the Petitioner.

Facts of the Case

The appellant was establishing a new factory and it had filed an application for advance ruling before the Authority for Advance Ruling (AAR) on the eligibility of ITC on procurement of air conditioning and cooling system and ventilation system including the services of installation and commissioning the same.

The AAR held that the appellant would not be eligible for ITC on air conditioning and cooling system and ventilation system since they are blocked credit falling under Section 17(5) of the CGST Act, 2017.It filed appeal against the order.

AAAR Held

The Appellate Authority for Advance Ruling noted that the installation of the air conditioning and cooling system and ventilation system via a works contract service would make it an immovable property. Therefore, it would cease to be a plant and machinery and ITC would be blocked under Section 17(5)(c) of CGST Act, 2017. Thus, it was held that the appellant would not be eligible to avail ITC on supply of air conditioning and cooling system and ventilation system.