ITC Not Available on Repair & Maintenance Services Received for Diving Support and Security Patrol Vessel Used for Non-Transport Purposes | AAAR

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  • Last Updated on 20 April, 2025

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ITC on non-transport vessels

Case Details: Sikka Ports & Terminals Ltd., In re - [2025] 173 taxmann.com 334 (AAAR-GUJARAT)

Judiciary and Counsel Details

  • Rajeev Topno & B V Siva Naga Kumari, Member
  • V.G. Iyengar, Asstt. Commissioner CGST for the Petitioner.
  • Abhishek Deodhar, Adv. for the Respondent.

Facts of the Case

The applicant, a Port and terminal handling facility operator, is involved in receiving crude oil and other feedstock, as well as evacuating finished products from a crude oil refinery. The facility operates Single Point Moorings (SPMs) located mid-sea, where Very Large Crude Carriers (VLCCs) discharge liquid cargo. This discharged cargo is then transported via sub-sea pipelines to Marin Tank Farms.

The applicant employs Diving Support Vessels (DSVs) and Security Patrol Vessels (SPVs), which are used for maintenance, diving operations, and operational support at the mooring points. The applicant sought an advance ruling from the Gujarat Appellate Authority for Advance Ruling (AAAR) to determine whether Input Tax Credit (ITC) could be claimed on the repair and maintenance services related to these vessels, which are used for non-transportation purposes, but play an integral role in the port’s operations.

AAR Held

The Hon’ble Gujarat AAAR held that ITC is not available for the repair and maintenance services of the DSV and SPV, as these vessels are not used for the transportation of goods. The AAAR determined that services related to these vessels are blocked under Section 17(5) of the CGST Act, as they do not meet the statutory criteria of being primarily used for transportation.

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