Co-op Housing Society denied Input Tax Credit for lift replacement under GST Act. Lift deemed immovable property.

The Co-operative Housing Society was denied Input Tax Credit (ITC) on the replacement of a lift/elevator under the Goods and Services Tax Act. The Authority ruled that the lift, once installed, becomes an immovable property integral to the building, making it ineligible for ITC as per Section 16 of the CGST Act. The decision emphasized the distinction between movable and immovable property and referenced legal definitions and precedents to support the ruling. The question regarding blocked credits was not addressed due to the negative response on the entitlement of ITC for lift replacement.

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Issues:
1. Entitlement of Input Tax Credit on replacement of lift/elevator by a Co-operative Housing Society.
2. Applicability of blocked credits under the Goods and Services Tax Act.

Entitlement of Input Tax Credit:
The applicant, a Co-operative Housing Society, sought an advance ruling on claiming Input Tax Credit (ITC) on GST paid for replacing an existing lift/elevator. The applicant argued that the replacement falls under works contract activity, which is considered a service under the GST Act. They contended that lifts are equipment fixed to earth for making outward supply of services, hence not covered under blocked credits. The jurisdictional officer referred to a service tax notification regarding reimbursement of charges in housing societies. The Authority observed that after installation, the lift becomes an immovable property integral to the building, following Supreme Court precedents. As per Section 16 of the CGST Act, ITC is not available for construction of immovable property, including plant or machinery. The Explanation to Section 17 clarified that ITC is available for plant and machinery fixed to earth, excluding civil structures. Consequently, the Authority ruled that the applicant is not entitled to ITC on lift replacement.

Blocked Credits under GST Act:
The Authority did not address the second question regarding blocked credits due to the negative response to the first question. They emphasized that the replacement of lifts results in the creation of an immovable property, making the applicant ineligible for ITC. The decision was based on the nature of works contract activity and the integration of the lift with the building structure. The ruling highlighted the importance of understanding the distinction between movable and immovable property under the GST Act. The judgment referenced legal definitions and precedents to support the conclusion that lifts, once installed, become part of the immovable property, thereby affecting the eligibility for ITC. The ruling was made under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017, dated January 22, 2020, by the Authority for Advance Ruling in Maharashtra.

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