The central air conditioning plant, lift, electrical fittings, and fire safety extinguishers are immovable property and do not qualify for input tax credit (ITC), Gujarat Appellate Authority for Advance Ruling (AAAR) noted.
The petitioner, M/s. The Varachha Co-Op. Bank Ltd., furnished that they are building a new administrative building and incurring the cost of distinct services. Also, it added that they were qualified for the ITC.
The appellant had joined a contract for the ‘supply & erection’ of ‘Central Air Conditioning System’. Section 2(119) of the CGST Act, illustrates the ‘Works Contract’. The term ‘works contract’ is limited to contracts to do with immovable property, which is depicted in clause 3(26) of the General Clauses Act. 1897. Section 3 of the Transfer of Property Act 1882, further defines the phrase ‘attached to earth’.
According to the petitioner, the lift shall be able to be sold when someone wishes to buy the same and can be dismantled and sold. Hence same can not be prudent to hold the lift, assembled and erected at the premises, to be the immovable property.
The appellant plans to install ‘Electrical Fittings’ both inside and outside a structure. They won’t claim Input Tax Credit (ITC) for Electrical Fittings used in civil construction due to Section 17(5) of the CGST Act. However, they argue that other ‘Electrical Fittings’ aren’t explicitly barred.
Regarding Fire Safety Extinguishers, the applicant argues they qualify as ‘Plant and Machinery,’ movable and marketable. They contend that the restrictions in Section 17(5)(c) & (d) of the CGST Act don’t apply to procuring inputs installed in their administrative building, and thus, ITC should apply.
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A two-member Authority panel, with Samir Vakil, Member SGST, and BV Siva Naga Kumari, Member CGST, concluded that items like the Central Air Conditioning Plant, Lift, Electrical Fittings, and Fire Safety Extinguishers are deemed immovable property, making them ineligible for ITC.
| Case Title | M/s. The Varachha Co-Op. Bank Ltd. |
| GSTIN of the Appellant | 24AABAT4356N1Z6 |
| Date | 04.10.2023 |
| Name of Appearance | Mr. Hardik P. Shah |
| Gujarat GST AAAR | Read Order |
