ITC eligibility on houseboat, Goods and Services Tax - GST

[HIMANSHU BHUSHAN]

Dear users, I want to ask whether houseboat would be considered as movvable or immovable under GST? Because in case it is consdiered as immovable, ineligibility of ITC under Section 17(5)(c) and (d) relating to works contract and construction of immovable property may get attracted.

Thanks in advance

Posts / Replies

[RaamSrinivasan Kalpathi]

Under provisions of the Income-tax Act, 1961 houseboats are NOT considered as Immovable property for purposes of availing deduction Sec.54 - 'Profit on sale of property used for residence'.  These have been considered as 'movable assets' and Sec.54 deduction have been denied.  

[Sadanand Bulbule]

Dear Sir

Immovable property is defined under Section 3(26) of the General Clauses Act, 1897 as including land, benefits arising out of the land, and things attached to the earth, or permanently fastened to anything attached to the earth. “Things attached to the earth” is defined under Section 3 of Transfer of Property Act, 1882 as (a) rooted in the earth, as in the case of trees and shrubs, (b) imbedded in the earth, as in the case of walls and buildings, and (c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached. The permanency of such fastening is required to be tested based on the nature of the components, that is, it is to be seen whether it can be removed, dismantled and assembled/used elsewhere without damage.

Keeping this interpretation in mind, houseboats shall have to move on water to be functional. What is movable is not immovable. Accordingly the entitlement of ITC has to move positively.

[Ganeshan Kalyani]

I agree with the view of the experts. ITC is eligible.

[KASTURI SETHI]

   A   foolproof reply  by Sh.Sadanand Bulbule, Sir.

[Sadanand Bulbule]

Dear Sir

Please refer the following CBIC Circular also:

Circular No. 219/13/2024-GST