Availability of ITC on capitalised as furniture and fixture
The applicant states that he is in the business of supplying shared works pace/office space to the freelancers, start-ups, small businesses and large enterprises. Towards this end, the Applicant procures goods and services from various contractors for fitting-out of the workspaces and provides the said workspace on rent, to various companies and individuals as sharing work-spaces. The applicant states that he has paid GST on the inputs procured.
(b) The applicant states that 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.
There cannot be office space unless these are fixed and hence it can be said to be permanently fastened to the building. Hence the fixing of sliding and stacking glass partitions amounts to addition or alteration to an immovable property and hence are used for the construction of an immovable property and hence input tax credit shall not be available on,-
(i) the works contract services when supplied for construction of immovable property; and
(ii) the goods or services or both received by a taxable person for construction of an immovable property on his own account even when it is used in the course or furtherance of business.
the wood used for flooring is attached by using a foam called polished streap foam and at ground level, a cementious bare panel is erected using pedestals and thereafter, foam is used to lay the wood. The wooden flooring in this case can be easily detached and reused. This only adds to the value to the building and is not sine qua non for the office space, unlike the partitions. It is also pertinent to note that the wooden flooring which is detachable can be removed and replaced without affecting the office space.
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