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TMI Blog2020 (5) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... . This construction is done by the Appellant on his own account. Further, the detachable sliding and stackable glass partitions are accounted in the Appellant s books of account as fixed assets under the head furniture and fixtures . They are not capitalised as immovable property but rather as movable assets. The lower Authority has observed that declaring the fixtures under the head Furniture and Fixtures does not make the items movable and they continue to be immovable property. However, the glass partitions are movable property by applying the tests of extent and object of annexation. There is no permanency in affixing such partitions as the same can be dismantled and re-fixed to signify a change in the dimensions of the work space. The fixing of the partitions to the ground using nuts and bolts only serves to give a false sense of permanency while in reality it is not so. The detachable sliding and stackable glass partitions are movable property and addition /fixing of glass partitions does not amount to construction of immovable property. Therefore, the procurement of detachable sliding and stackable glass partitions will be eligible for input tax credit and will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k-spaces. The Appellant has paid applicable GST on such procurements. Section 16 (1) of the CGST Act entitles a registered person to take credit of input tax charged on any supply of goods or services or both which are used or intended to be used in the course or furtherance of business. However, as per Section 17(5) of the CGST Act, a restriction is imposed with respect to input tax credit (hereinafter referred to as ITC ) on procurement of goods and services or both received by the taxable person for construction of an immovable property. However, the term construction is limited to supplies to the extent capitalized to an immovable property. The two major components which are in the nature of furniture and fixtures, that are used in the Appellant s buildings are- Detachable 14mm Engineered wood with Oak top wooden flooring; and Detachable sliding and stacking glass partitions. 5. The Appellant sought an advance ruling in respect of the following question: a) Whether input GST credit can be availed by the applicant on the detachable 14mm Engineered Wood with Oak top Wooden Flooring which is movable in nature and capitalized as furniture and fixture , and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven that the Appellant procures detachable sliding and stacking glass partitions, which are installed in office spaces rented out by the Appellant, the condition as provided under Section 16 for availment of ITC stands satisfied. 7.2. The Appellant submitted that the restriction provided under Section17(5)(d) does not apply to Detachable sliding and stacking glass partitions; that the credit restriction under Section 17(5) is only in so far as inputs/ input services are used for construction of an immovable property ; that that the term for used in Section 17(5)(d) is more specific than in relation to ; that the word for generally means for the purpose of . The Appellant placed reliance on the case of the Hon ble Supreme Court in Mansukhlal Dhanraj. Jain Ors. Etc. v. Eknath Vithal Ogale = 1995 (2) TMI 439 - SUPREME COURT wherein the Apex Court compared the words for and relating to and concluded that the latter has wider connotations than the former; that based on the above ruling, it can be concluded that in order to be covered by the restrictions provided under Section 17(5)(d), the goods or services must be used directly for construction of immovable proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions can be made very quickly. Any and all alterations can be made in case of Private offices, with great flexibility, since the same are not permanent and solely made for the members requirements and needs. 7.4. The Appellant submits that anything embedded to the earth and which cannot be dismantled and moved, strictly are covered under the ambit of immovable property thus restricting the same from availment of ITC as per Section 17 (S)(c) (d) of the CGST Act; that the detachable sliding and stacking glass partitions are not covered under embedded to the earth or cannot be dismantled and moved , since such glass partitions, are detachable. The Appellant submits that the term immovable property has not been defined under GST Act, therefore reference needs to be taken from Section 3(26) of the General Clauses Act, 1897, which reads as follows: immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. 7.5. The Appellant also submitted that though the terms attached to the earth is not defined in the GST law, reference can be drawn to Section 3 of the Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pitalised as immovable property but are in fact recorded as furniture and fixtures , since the glass partitions can be detached and re-used and are not considered to be the permanent civil assets. It is for this very reason that the said glass partitions cannot be capitalized as immovable property; that the classification of glass partition in their books of accounts as furniture and fixture is in accordance with appropriate legal accounting standards and compliant with the requirements under the Companies Act; that a chartered accountant certificate, certifying the Detachable sliding and stacking glass partitions fittings as furniture and fixture was submitted to the lower Authority and therefore, the said glass partitions must classified as movable property, since the same can be dismantled an dre-used. 7.7. The Appellant submits that in the process of fitting the detachable glass partitions, an aluminium store front is fixed to the structure with the help of nuts and bolts, and to the same, the glass is attached. Therefore, the Appellant submits that since it Is evident that detachable sliding and stacking glass partitions would qualify as a movable property , on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated the submissions made in the grounds of appeal. They also emphasized the fact that the glass partitions are only screwed to the flooring and are not permanently fixed to the earth and that the observation of the lower Authority on this aspect is not correct. DISCUSSIONS AND FINDINGS 9. We have gone through the records of the case and considered the submissions made by the Appellant in their grounds of appeal as well as at the time of personal hearing. 10. We find that the Appellant has sought for condonation of delay of 29 days in filing the present appeal. The impugned order of the lower Authority dated 30.09.2019 was received by the Appellant on 11.10.2019. In terms of Section 100(2) of the CGST Act, every appeal to this Authority should be filed within a period of 30 days from the date on which the Advance Ruling order is communicated to the aggrieved party. The proviso to Section 100(2) empowers this Authority to condone the delay in filing the appeal by another period of 30 days. In this case, the due date for filing the appeal was 10-11-2019 but the Appellant has filed the appeal on the 9th December 2019 after a delay of 29 days from the due date for filing ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble notwithstanding anything contained in Section 16(1) of the said Act. We are concerned with the provisions of clause (d) of Section 17(5) of the said Act. 13. Section 17(5)(d) reads as follows: (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: - (d) Goods or Services or both received by a taxable person for construction of an immovable property (other than Plant or Machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation : For the purposes of clauses (c) and (d), the expression construction includes reconstruction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property. 14. When we read the text of Section 17(5)(d) together with its explanation, we find that for triggering the restriction under this clause, certain criteria have to be satisfied viz: a) The goods or services should be used for construction of immovable property. b) The construction can be in the form of re-con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve it. The object of annexation test lays down that where a movable property gets annexed with an immovable property, if the intent of annexation is of permanent beneficial enjoyment of the immovable property, then the fixture becomes an immovable property. If the intent of annexation is the beneficial enjoyment of the movable property, then the property still remains movable. Applying the above tests to this case, we find that the glass partitions are not permanent and are not embedded to the earth. They can be dismantled and moved according to the requirements of the clients of the Appellant. Although they are fixed to the earth with nuts and bolts, they can be dismantled without demolishing the civil structure. Therefore, the detachable sliding and stackable glass partitions do not qualify as immovable property. 17. Further, we find that the detachable sliding and stackable glass partitions are accounted in the Appellant s books of account as fixed assets under the head furniture and fixtures . They are not capitalised as immovable property but rather as movable assets. The lower Authority has observed that declaring the fixtures under the head Furniture and Fixtures does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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