The Gujarat Authority of Advance Ruling (AAR) ruled that the Input Tax Credit (ITC) is admissible on New Locker Cabinet and Generator.
The applicant, M/s. Varachha Co-operative Bank Ltd. submitted that they are constructing New Administrative Building and incurring cost of various services namely Central Air Conditioning Plant, New Locker Cabinet, Lift, Electrical fittings, such as Cables, Switches, NCB and other Electrical Consumables Materials, Roof Solar, Generator, Fire Safety Extinguishers, Architect Service Fees, Interior Designing Fees.
The applicant has submitted as follows: Section 17 (5) of CGST Act, 2017 deals with “Blocked Credit” in GST. Sub-Section (c) & (d) of Section 17 (5) deal with blocked credit relating to “Works Contract Services” and “Goods & Service” received for construction of Immovable Property respectively. For understanding the Blocked credit for construction of Immovable Property in GST a Conjoint reading of Section 17 (5) (c) & 17 (5) (d) is required. The meaning of “Works Contract” and basics of Section 17 (5) (c) & (d) are reproduced as follows.
As per Section 2(119) of GST Act, “Work Contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
The applicant has sought the advance ruling on the issue whether the Applicant, having undertaken the Construction of their New Administrative Office, will be eligible for the ITC on various services namely Central Air Conditioning Plant, New Locker Cabinet, Lift, Electrical fittings, such as Cables, Switches, NCB and other Electrical Consumables Materials, Roof Solar, Generator, Fire Safety Extinguishers, Architect Service Fees, Interior Designing Fees.
The coram of Members Sanjay Saxena and Arun Richard held that Input Tax Credit is admissible on New Locker Cabinet and Generator. Input Tax Credit is blocked under Section 17(5)(c ) CGST Act for Central Air Conditioning Plant; Lift; Electrical Fittings; Fire Safety Extinguishers, Roof Solar Plant. Input Tax Credit is blocked under Section 17 (5) (d) CGST Act for Architect Service and Interior Decorator fees.
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