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TMI Blog2020 (7) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and cannot work otherwise. Thus, civil structures and foundation as supporting structure for fastening of plant and machinery to earth has been included as part of plant and machinery. In the instant case, the lift has become part of the building and thus falls under the exclusion from plant and machinery and accordingly, we do not find any reason to interfere with the clear provisions of statute. The input tax credit of tax paid on Lifts procured and installed in hotel building shall not be available to the applicant as the same is blocked in terms of Section 1 of the CGST Act 2017, become an integral part of the building. - Case No. 27/2019, Order No. 10/2020 - - - Dated:- 8-6-2020 - SHRI MANOJ KUMAR CHOUBEY AND SHRI VIRENDRA KUMAR JAIN, MEMBER Present on behalf of applicant : CA Neeraj Agrawal, Accounts Officer PROCEEDINGS (Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods Service Tax Act, 2017) 1. M/s JABALPUR HOTELS PRIVATE LIMITED (hereinafter referred to as the Applicant) was established with an object to construct Hotel in Jabalpur at Mauza Ghana Khasara No 195/14. 195/2, 194 Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be eligible for GST credit of items used in the course or for the furtherance of restaurant services. 6.6 As the hotel is multi storied, hence to provide facility to guest we would be requiring lift in the hotel premises. 6.7 Section 16 Chapter V of CGST Act 2017 lay down the conditions specified for claiming Input Tax Credit. Lift that will be purchased will full fills all the conditions of section 16. 6.8 Section 17 Lay downs certain conditions for Apportionments of credit and block credits. 6.9 Section 17(5) blocks credit of works contract and goods or services received by a taxable person for construction of an immovable property (other than plant and machinery) 6.10 As Lift is a machinery and hence in our opinion does not fall in the restriction of section 17(5) of CGST Act 2017. 6.11 The company Jabalpur Hotels Private Limited is constructing Hotel Containing approx. 100 numbers of Rooms. 6.12 Lift is an essential part in a hotel and without which it very difficult to provide best services to our guest. 6.13 Section 17(5) blocks credit of works contract and goods or services received by a taxable person for construction of an immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structural supports but excludes. i. land, building or any other civil structures; ii. telecommunication towers; and iii. pipelines laid outside the factory premises b. As per Oxford References The equipment required to operate a business. Capital allowances are available for plant and machinery although neither is defined in the tax legislation. This defines plant and machinery as whatever apparatus is used by a businessman for carrying on his business - not his stock in trade which he buys or makes for resale: but all goods and chattels, fixed or moveable, live or dead, which he keeps for permanent employment in the business . Subsequent cases have been largely concerned with the distinction between plant actively used in a business, and so qualifying for capital allowances, and expenditure on items that relate to the setting up of the business, which do not so qualify . c. Definition under legal dictionaries: i. As per Law Lexicon, Plant means the fixtures, machinery, tools, apparatus, appliances etc., necessary to carry on any trade or mechanical business, or any mechanical operation or process. ii. As per Law Lexicon, Machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tand the eligibility of the same under the GST laws. i) M/s. Rattha Holding Co. Pvt. Ltd. Vs Commissioner of Central Services Tax, Chennai (2018 (9) TMI 1722) - wherein the Hon ble Chennai Tribunal held that disallowance of credit of input service used for Construction of buildings is unjustified. ii) Commissioner of Central Excise, Vishakhapatnam-II vs M/s. Sai Samhmita Storages (P) Ltd. (2011 (2) TMI 400) - wherein the Hon ble Andhra Pradesh High Court held that the assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided and the finding of the original authority as well as the appellate authority are clearly erroneous. iii) Commissioner of Central Excise, Salem vs. Ashok Agencies (2016 (5) TMI 782) - wherein the Hon ble Chennai Tribunal held that Commissioner (Appeals) has not committed any error to grant Cenvat credit to the respondent on those input services which are not disintegrated from providing output service. It is strange that how without bringing out an edifice Revenue shall realize its dues towards rental service. i. Further, the following judicial pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onouncing ruling. 7.3 The applicant is a Private Limited Company which has started construction of a Hotel in Jabalpur, as already discussed in the foregoing paras. It has been mentioned that the proposed hotel would have more than 100 rooms along with other facilities like gym, spa, swimming pool, banquet, restaurant etc. The applicant has mentioned that the hotel is a multi-storeyed building and, thus, the provision of lift is essential for running the business. It has been mentioned that the room tariff of some of the rooms is proposed to be more than ₹ 7500/- and therefore the restaurant would be paying GST @18% and availing input tax credit on goods and services used in course or for furtherance of business. 7.4 The applicant have sought ruling on availability of input tax credit of tax paid on Lift purchased and installed by the applicant in the hotel building, particularly with reference to blocked credit as defined under the provisions of Section 17(5) of the GST Act. The application, interalia, mentions that the said Lift is being capitalized in the books of the company and depreciation as per the provisions of income Tax Act,1961 is charged on the cost of lift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. Thus, the lifts are sought to be considered as input for hotel building. That being the case, the input tax credit is blocked unambiguously in terms of Section 17(5)(d), even when such goods or services or both are used in the course or furtherance of business . To be more precise, hotel building being an immovable property, any input or input service going into its construction shall not be available for availment of input tax credit. Further, a lift comprises of components or parts (goods) like lift car, motors, ropes, rails, etc. and each of them has its own identity prior to installation and they are assembled/installed to create the working mechanism called lift. The installation of these components/parts with immense skill is rendition of service and without installation in the building, there is no lift. Lifts are assembled and manufactured to suit the requirement in a particular building and are not something sold out of shelf and, in fact, the value of goods and the cost of the components used in the manufacturing and installation of a lift are subject to taxation while the element of labour and service involved cannot be treated as goods. Parts of the lift are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and machinery. To set to rest the disputes regarding the definition of the Plant, in light of the fact that input tax credit of works contract services, goods and services received as input for construction of immovable property on own account has been specifically put under the Blocked Credit list with the rider that it shall not apply to plant and machinery, it was incumbent that there should be clarity regarding classification of buildings and civil structures that were hitherto been classified as Plant . Accordingly, in the explanation relating to Plant and Machinery, beneath sub-section (6) of Section 17, while providing the meaning of the term plant and machinery, it has been clearly stated that Buildings and Civil Structures shall not be covered under the term Plant. However, while so clarifying, it has been accepted and understood that plant and machinery many a times requires support structure and / or foundation for installation and cannot work otherwise. Thus, civil structures and foundation as supporting structure for fastening of plant and machinery to earth has been included as part of plant and machinery. In the instant case, the lift has become part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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