ITC AVAILABLE ON LIFT INSTALLED IN COMMERCIAL BUILDING GIVEN FOR RENT, Goods and Services Tax - GST

[S.C. WADHWA]

Dear Expert,

We have purchased one lift leving gst and installed in building given on rent for commercial purpose. My query is whether GST paid on Lift in Dec.23 will be available till 30th Sept.24 as we have not show this in any gst return till now. Please give your expert opinion.

REGARDS,

WADHWA

Posts / Replies

[Sadanand Bulbule]

Dear all

ITC on lift-- tsunami of divergent researched opinions are running in parallel on the same query.  The effect is, there is no unanimity on legal position. I feel this bitter truth really is stranger than fiction. Democracy guarantees freedom of expression. Everyone has to respect it.

[KALLESHAMURTHY MURTHY]

Dear all Experts, 

Installation of the lift in the building is not eligible to avail ITC since it is treated as part of immovable property. It is blocked u/s 17(5) (d).

During the VAT period also, there were cases of ITC disallowance.

With regards.

[Amit Agrawal]

Dear Shri KALLESHAMURTHY MURTHY Ji,

I think opposite sides of views on subject ITC are thoroughly presented on this discussion forum along-with legal reasoning backing such views. And both sides (i.e. contributors who feel subject ITC is available and contributors who feel subject ITC is not available) are not willing to change their position as they truly believe in respective position taken by them on the subject matter

W.r.t. your last post above, kindly let us know 'relevant provisions of VAT' under which subject ITC was denied along-with sample case-laws thereof.

This will help us to compare current gst provisions under discussion (i.e. sub-clauses (c) & (d) of Section 17(5) read with explanations given thereunder where ITC against construction of 'immovable property including land, building or any other civil construction' is denied while simultaneously 'P&M' was excluded from 'immovable property'). 

If similar provisions were existing under VAT laws & there are case-laws denying ITC using those similar provision, same will be very directly helpful to take this discussion towards some conclusion. 

Thanking you in anticipation!

[Amit Agrawal]

Also, I wonder how VAT tax-credit provisions & cases-laws thereof will be directly relevant in the situation under discussion here where issue is 'services' provided & not 'goods' sold. 

Anyway, I will wait for clarity (i.e. 'relevant provisions of VAT' under which subject ITC was denied along-with sample case-laws thereof) as requested in above post.

[KALLESHAMURTHY MURTHY]

Dear Amith Agarwal Ji, 

Sir, 

The query is about GST paid on Lift.

Here I am quoting three Advance Ruling cases referring to Sec. 17(5)(d) of the CGST Act.

Regarding cases under the VAT period, I have to verify the re-assessment orders which are not readily available now.   

1. The Maharashtra AAAR ruled that no Input Tax Credit (ITC) can be claimed on Lift Installation Charges. In the Judgment of M/S Las Palmas Co-operative Housing Society Ltd. (Dated 20/07/2020 Order No MAH/AAAR/RS-SK/24/2020-21).

The AAAR ruled that the Appellant would not be eligible to avail the ITC in respect of the GST paid to the lift contractor, in terms of Section 16(2)(b) read with Section 17(5)(d) of the CGST Act, 2017

2. AAR of MP in the case of M/S Jabalpur Hotels Pvt. Ltd. Dated 08/06/2020 Order No. 10/2020).

In this, the AAR finds that the lift consists of components or parts (goods) like lift car, motor, ropes, rails etc. and each of them has its separate identity prior to installation and when they are assembled/installed together they create lift.

It is held that the lift has become part of the building and ITC shall not be available in terms of Section 17(5)(d) of the CGST Act, 2017.

3. Tarun Realtors Private Limited (Order No.KAR ADRG 103/2019 dated 30-09-2029.

In this case, the installation of the lift is treated as blocked credits u/s 17(5)(d).

Expecting more clarity on the issue.

With respects. 

[Amit Agrawal]

Dear Shri KALLESHAMURTHY MURTHY Ji,

I have already dealt with these GST AAR / AAR rulings in my earlier posts above (specially at my post at Sr. 26, 30 & 32) and explained my reasons for disagreement with them. I further elaborated my views and reasoning while answering various questions put by Shri Alkesh Jani Ji in my posts at Sr. No. 47 & 49 above. 

As you mentioned about some VAT cases on similar issue in your post at Sr. No. 52 above, I had sought clarity there-against.