GST: Co-Housing Societies can’t avail Input Tax Credit on Lift Installation Charges, rules AAAR [Read Order]

GST: Co-Housing Societies can’t avail Input Tax Credit on Lift Installation Charges, rules AAAR [Read Order]

GST - Co-Housing Societies - Input Tax Credit - Lift Installation Charges - AAAR - Taxscan

The Maharashtra Appellate Authority of Advance Ruling (AAAR) while upholding the AAR’s ruling held that the Co-Housing Societies can not avail Input Tax Credit (ITC) on lift installation charges.

The Appellant, M/s. Las Palmas Co-operative Housing Society Limited has been  recovering amountfrom each of the society members under various heads such as Service Charges, Electricity Charges, Lift Charges, Ground Rent, Sinking Fund, Repair Fund, Water Charges, Parking Charges, etc., and paying 18% GST on it after availing the input tax credit.

The Appellant is under the process of replacing existing lift of the society for which a Contract has been awarded to M/s. Fujitec India Private Limited. The Appellant is also recovering a separate amount for replacement of lifts from the members (apart from the normal charges as stated above) as “contribution for installation of new lifts” and charging 18% GST on it to the members of the society. The Appellant is recovering such an amount of contribution for the installation of the new lifts under the separate Tax Invoice.

The applicant sought the advance ruling on the issue whether the Applicant/Appellant is eligible for the input tax credit of lift installation charges paid to Fujitec, if it is booked as Capital expenditure in their books without availing the depreciation on 18% GST charged by Fujitec.

The AAR held that the Appellant will not be eligible to avail the ITC in respect of the GST paid on lift installation charges paid to the lift contractor, in terms of section 16(2)(b) read with section 17(5)(c) and 17(5)(d) of the CGST Act, 2017.

The coram consisting of Sanjeev Kumar and Rakesh Kumar Sharma did not find any reason to interfere with the ruling passed by the Maharashtra AAR and ruled that Appellant is availing the works contact services from the lift contractor for the replacement of the lift in the Society, which after being installed, becomes immovable property, and therefore ITC in respect of GST paid on such works contract services would not be admissible to the Appellant.

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