GST ITC on Breakwater Construction Denied Again; Matter Remanded but Ruling Stays Against Konkan LNG
The company, M/s. Konkan LNG Private Limited (applicant), has filed an application dated February 22, 2019, in Original GST-ARA, seeking the Maharashtra Authority for Advance Ruling (AAR) Goods and Services Tax (GST), clarifying some queries concerning its business. The applicant possesses its registered address at RGPPL, Guhagar Road, Anjanwel, Ratnagiri, Maharashtra, Ratnagiri – 415634.
Questions Asked by Maharashtra AAR:
The applicant has asked the following questions seeking the Maharashtra Authority for Advance Ruling (AAR):
“Question 1: Whether on the facts and circumstances of the case and as per the law, the applicant is not eligible to avail/utilise the input tax credit of the taxes paid in terms of section 16 read with section 17 of the MGST ACT/CGST ACT (CGST/SGST/IGST) to the supplier of goods/services on the construction of the breakwater wall, which is an important and integral part of the existing jetty and very much required for the purpose of safety and longevity of the jetty, and it is imperative for making the existing jetty as fully workable as an all-weather jetty and hence improves the operational efficiency of the applicant.
Question 2: Whether, on the facts and circumstances of the case, as per the law and scope of work, the works contract services that the KLPL intends to procure are not predominantly earthwork (that is, constituting more than 75 percent). of the value of the works contract), and the services of the works contract by the contractor are covered under item (vii) of serial No. 3 of the Table of the Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, as amended by Notification No. 31/2017-Central Tax (Rate) dated 13th October, 2017.”
Answers Given by Maharashtra AAR:
The Maharashtra Authority for Advance Ruling (AAR) has given the following answers to the questions asked by the applicant:
Answer 1: The advance ruling has given the answer in the affirmative (yes), meaning the applicant is not eligible to claim the input tax credit (ITC) of the taxes paid under section 16 read with section 17 of the MGST ACT/CGST ACT (CGST/SGST/IGST) to the supplier of goods/services on the construction of the breakwater wall.
Answer 2: The authority did not give any ruling on this question. As per the Maharashtra Authority for Advance Ruling, if they answer this question, then it would have a direct impact on the rights of the contractor who provided the works contract service to the applicant.
The present ruling on the application filed by the applicant, Konkan LNG Private Limited, was given on February 22, 2019. However, the applicant, dissatisfied with the present AAR, filed another application before the Appellate Authority for Advance Ruling (AAAR). The AAAR upheld the ruling of the AAR through an order dated November 06, 2019.
Still, the applicant was not satisfied with the decision of AAAR and hence filed a writ petition before the Honourable Bombay High Court (Writ Petition no. 313 of 2021) and the Hon. High Court.
Citation: M/s. Konkan LNG Private Limited (AAR Maharashtra); GST-ARA-123/18-19/2024-25/B-640; 18/12/2025
