Case Details: In re: H-Energy Gateway Pvt. Ltd. (2025) 32 Centax 252 (A.A.R.-GST-Mah.)
Judiciary and Counsel Details
- Shri D.P. Gojamgunde & Ms Priya Jadhav, Members
Facts of the Case
The applicant, engaged in setting up a Liquified Natural Gas (LNG) re-gasification project at Jaigarh Port, approached the Authority for Advance Ruling (AAR), Maharashtra, seeking clarity on the admissibility of input tax credit (ITC) on goods and services used in constructing Tie-in Pipelines. The project involved a Floating Storage Regasification Unit (FSRU), a ship moored to a jetty with 4 MMTPA capacity, where the process of re-gasification of LNG takes place. To facilitate delivery of the re-gasified LNG to customers, the applicant laid pipelines connecting the FSRU to the cross-country pipeline/National Grid. The applicant contended that the pipeline forms an integral part of the business infrastructure and therefore ITC should be allowed. It was submitted that a structure qualifies as a “factory” only if it comprises a building, and since the pipeline is functionally linked to the re-gasification activity, credit should not be blocked under Section 17(5)(c) and 17(5)(d) of the CGST Act and the Maharashtra GST Act. The matter was accordingly placed before the Authority for Advance Ruling (AAR), Maharashtra.
AAR Held
The AAR, Maharashtra held that the applicant’s assertion that a ‘factory’ necessarily requires a building was untenable, emphasising that the act of production or manufacture, not the physical presence of a building, defines a factory. Since re-gasification takes place on the FSRU (ship), it qualifies as a factory under the GST framework. Accordingly, the pipeline laid from the FSRU to the National Grid was held to be a ‘pipeline laid outside the factory premises’. As per Section 17(5)(c) and 17(5)(d) of the CGST Act and the Maharashtra GST Act, input tax credit on goods and services used for construction of immovable property and pipelines laid outside the factory premises is specifically blocked. Therefore, the applicant was held ineligible to avail ITC on the construction of the Tie-in Pipelines.
List of Cases Cited
- A.V. Fernandez v. State of Kerala — AIR 1957 SC 657 — Referred [Para 2.3.18]
- Chief Commissioner of Central GST v. Safari Retreats (P.) Ltd. — [2025] 174 taxmann.com 894 (SC) — Referred [Para 1.22]
- CIT v. Karnataka Power Corpn. — [2000] 112 Taxman 629/247 ITR 268 (SC) — Referred [Para 2.4.14]
- CIT v. Taj Mahal Hotel — [1971] 82 ITR 44 (SC) — Referred [Para 2.4.12]
- CIT v. Victory Aqua Farm Ltd. — [2015] 61 taxmann.com 166/234 Taxman 598/379 ITR 335 (SC) — Referred [Para 2.4.13]
- Commissioner of Sales Tax v. Ravi Trading Company — 2018 (9) G.S.T.L. 250 (Bom.) — Referred [Para 2.3.21]
- Msco. Pvt. Ltd v. Union of India — AIR 1985 SC 76 — Referred [Para 2.3.7]
- Reliance Gas Transportation Infrastructure Ltd. v. CST — [2016] 71 taxmann.com 324/59 GST 178 (Mumbai – CESTAT) — Referred [Para 2.4.11]
- Sales Tax Commissioner v. Modi Sugar Mills — AIR 1961 SC 1047 — Referred [Para 2.3.17]
- Sardar Gurmej Singh v. Sardar Partap Singh Kairon — AIR 1960 SC 122 — Referred [Para 2.3.23]
- Sri Chaitanya Educational Committee v. C.C., C. E. & S.T. — 2016 (41) S.T.R. 241 (Tri.-Bang) — Referred [Para 2.3.14]
- Western Concessions (P.) Ltd. v. Union of India — [2024] 168 taxmann.com 424 (Bombay) — Referred [Para 4]
- Western Concessions (P.) Ltd., In re — [2019] 106 taxmann.com 186/25 G.S.T.L. 603 (AAR – MAHARASHTRA) — Referred [Para 1.19]
