INPUT TAX CREDIT ON OFFICE INTERIORS WORKS

[Raghu K]

Dear Experts,

Whether can we take ITC against Interior Work designing & Materials,

Because, we shifted to our new office for our company. In which we incurred amount for Interior Consultancy, Materials, etc., & the same has been capitalized.

Kindly Guide me. Thanking You,

Raghu

[Himansu Sekhar]

Please refer to id-113412

[Rajagopalan Ranganathan]

Sir,

Section 17 (c) & (d) of CGST Act, 2017 stipulates that-

(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

Explanation.––For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property.

In my opinion your case is covered by Section 17 (d) of CGST Act, 2017 and hence input tax credit is not available to you.

[Ganeshan Kalyani]

Credit is not allowed.

[CSSANJAY MALHOTRA]

I endorse views of Sh Ganeshan ji as construction related activities wherever capitalised is not eligible for credit.

[Alkesh Jani]

, I request our experts to re-comment, after perusing the submission made under:-

First let me reproduce the definition of work contract as given in Section 2 of CGST, Act, 2017 “(119) “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract”

From above it can be said that works contract is limited only to construction of civil structure, once the civil structure is complete by way NOC or any other completion certificate issued by proper authority, services is said to be completed. However, interior designing takes place after the construction services is completed and interior designing services constitute mainly designing works, which falls under separate HSN code than of construction service. Only the cost of civil structure and material used for execution of civil structure, may be captalised and ITC of the same cannot be availed, in terms of Section 17(5)(d). In GST regime, under Section 17, the goods and services which are not eligible for ITC has been specifically mentioned e.g. health care, insurance, outdoor catering etc. non mention of interior designing amounts to eligible for ITC.

Further, suppose Table, Chair, Computer etc. are used in the course of business or furtherance of business and as these are essential for staff to run the business and these are shown separately in the Balance sheet. So in GST ITC can be availed on such capital goods, subject to condition benefit of depreciation is not availed under Income Tax Act.

Our expert may please correct me as this is for my knowledge purpose.Thanks

[YAGAY and SUN]

Can anybody imagine working without table chairs and interiors etc in a office. We endorse the very view of Mr. Alkesh Jani read with Rule 17(5) in this regard.

[DR.MARIAPPAN GOVINDARAJAN]

The views of Shri Alkesh Jani seems to be correct.

[CSSANJAY MALHOTRA]

Table/ Chairs is altogether different aspect that the query raised in question. ITC is available on same as the same is not part of Negative List.

I differ with views of Sh. Aklesh to the remaining part.

ITC availability / inadmissibility depends on various factors and in depth reading of 17(5)(d) would get you answer.

[YAGAY and SUN]

Interior design do include Tables and chairs.

[CSSANJAY MALHOTRA]

Interior designing is purely advisory service and does not include any sale of goods.

AI Summary

Input tax credit on capitalised office interior works may be disallowed as construction-related, while furniture may remain claimable.
Whether Input tax credit can be claimed for interior consultancy, materials and fittings capitalised as office interiors is disputed. One view treats such capitalised interior works as construction-related and excluded from credit under the construction/works-contract exclusion; an alternate view treats interior design as a distinct service and movable fittings as capital goods or inputs not on the negative list, potentially eligible for ITC subject to applicable conditions.