ITC Clarification: Limits on Construction Activities vs. Furniture Maintenance

The ruling clarifies that Input Tax Credit (ITC) is generally not available for construction-related activities involving immovable property to the extent of capitalization, as per Section 17(5) of the CGST/RGST Act, 2017. However, ITC is available for repairs and maintenance of movable furniture and fixtures, and for the purchase of new ready-to-use furniture, in accordance with Section 16 of the CGST/RGST Act, 2017.

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Issues Involved:
1. Building Repair Work
2. Repair Work relating to Electric Installation / Sanitary Fittings
3. Furniture & Fixture Repairing Work

Issue-Wise Detailed Analysis:

1. Building Repair Work
Q1.1: The applicant sought to know if GST paid on building materials such as cement, concrete, bricks, marble, etc., used for building repair is available for ITC.
Ruling: ITC will not be available to the extent of capitalization of building materials.

Q1.2: The applicant queried whether GST paid on labor supply for building repair, where material and supervision are provided by the applicant, is available for ITC.
Ruling: ITC will not be available to the extent of capitalization of GST on labor supply.

Q1.3: The applicant asked if it makes a difference if the works are carried out as a composite supply under a works contract.
Ruling: ITC will not be available to the extent of capitalization of building materials and labor supply services.

2. Repair Work relating to Electric Installation / Sanitary Fittings
Q2.1: The applicant questioned if GST paid on electrical fittings like cables, switches, NCB, etc., used for repairing existing electrical fittings, is available for ITC.
Ruling: ITC will not be available to the extent of capitalization of electrical fittings.

Q2.2: The applicant inquired whether GST paid on sanitary fittings such as tiles, commodes, bathtubs, etc., used for repairing existing sanitary fittings, is available for ITC.
Ruling: ITC will not be available to the extent of capitalization of sanitary fittings.

Q2.3: The applicant asked if GST paid on labor supply for repairing electrical installations and sanitary fittings, where material and supervision are provided by the applicant, is available for ITC.
Ruling: ITC will not be available to the extent of capitalization of labor supply services.

Q2.4: The applicant queried whether it makes a difference if the works are carried out as a composite supply under a works contract.
Ruling: ITC will not be available for works contract services to the extent of capitalization of the supply of goods and services.

3. Furniture & Fixture Repairing Work
Q3.1: The applicant sought to know if GST paid on materials like wood, board, mica, etc., used for repairing existing furniture and fixtures, is available for ITC.
Ruling: ITC for GST paid on the supply of the mentioned goods will be available in accordance with Section 16 of the CGST/RGST Act, 2017.

Q3.2: The applicant inquired whether GST paid on labor supply for repairing furniture and fixtures, where material and supervision are provided by the applicant, is available for ITC.
Ruling: ITC will be available for labor supply services in accordance with Section 16 of the CGST/RGST Act, 2017.

Q3.3: The applicant asked if it makes a difference if the works are carried out as a composite supply under a works contract for repairing movable furniture and fixtures.
Ruling: ITC will be available for GST paid on composite supply of goods (furniture & fixtures) and services (manpower supply) in accordance with Section 16 of the CGST/RGST Act, 2017.

Q3.4: The applicant questioned if ITC can be availed for GST paid on the purchase of new ready-to-use furniture such as chairs.
Ruling: ITC will be available for GST paid on the purchase of new ready-to-use furniture in accordance with Section 16 of the CGST/RGST Act, 2017.

Conclusion:
The ruling clarifies that ITC is generally not available for construction-related activities involving immovable property to the extent of capitalization, as per Section 17(5) of the CGST/RGST Act, 2017. However, ITC is available for repairs and maintenance of movable furniture and fixtures, and for the purchase of new ready-to-use furniture, in accordance with Section 16 of the CGST/RGST Act, 2017.

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