Input tax credit on detachable glass partitions allowed because they were not immovable property under the GST restriction.

Detachable sliding and stackable glass partitions used in workspace fit-outs were held not to be immovable property because they could be dismantled, reused, and removed without demolition of the civil structure. On that basis, their fixing did not amount to construction of immovable property on own account, so the input tax credit restriction under section 17(5)(d) did not apply. The credit was therefore admissible, and the ruling denying credit on the partitions was set aside.

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Issues: Whether input tax credit was admissible on detachable sliding and stackable glass partitions used in the assessee's workspace fit-outs, and whether such partitions were immovable property so as to attract the restriction under section 17(5)(d).

Analysis: Section 16(1) permits input tax credit on goods or services used in the course or furtherance of business, but section 17(5)(d) denies credit for goods or services used for construction of an immovable property on own account, including additions, alterations, repairs or renovations to the extent of capitalisation. The term immovable property was tested by reference to the principles of attachment to earth, including the extent and object of annexation. The partitions were found to be detachable, capable of dismantling and re-use, and removable without demolition of the civil structure. Their classification in the books as furniture and fixtures did not alter the result, but it supported the conclusion that they were not permanently embedded in the earth.

Conclusion: The detachable sliding and stackable glass partitions were not immovable property, their fixing did not amount to construction of immovable property, and input tax credit was admissible in favour of the assessee.

Final Conclusion: The restriction under section 17(5)(d) did not apply to the impugned glass partitions, and the advance ruling denying credit on that item was set aside.

Ratio Decidendi: Goods or fixtures that are detachable, capable of dismantling and re-use, and removable without demolition are not treated as immovable property for the purpose of the input tax credit restriction under section 17(5)(d).

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