Input credit on Capital goods and Furniture & Fixture & Repair of Building & others

[Sanjoy Das]

Pls clarify the input credit is available under GST of below mentioned queries :

a. Repairing of Office building / Guest house/ Employees building.

b. Painting of office building / Guest House/ Employees Building

c. Furniture & Fixture used in office purpose.

d. Furniture & Fixture used for employee benefit purpose.

Regards

Sanjoy Das

[DR.MARIAPPAN GOVINDARAJAN]

In my view, if the said expenses are met for furtherance of business, then input tax credit is allowed.

[KASTURI SETHI]

I support the views of Dr.Govindarajan, Sir. I further add that it would be near impossible to prove the utilization of credit on capital goods pertaining to repair/paint for employees' building and employee benefit purpose.

[Guest]

furtherance of business have to prove by GST dealer failing which ITC can not be claimed on the above goods.

[KASTURI SETHI]

Yes, burden of proof is cast on the person who avails credit. In the situations, it is hard nut to crack. Everything cannot be included in the course of business or furtherance of business. One has to be careful.

[KASTURI SETHI]

Practically all the capital goods and services mentioned by the Querist are basic requirements for running the business.It is not possible to run business without these goods and services. One has to read carefully legal definition of 'Plant & Machinery,' 'Business' ''in the course of business' and ''furtherance of business'. If any capital goods or services falls in the exclusion clause, ITC will not be allowed even though fitted in the definition of above terms. Definitions of Plant & Machinery and business have been provided in GST Acts but no definition has been given for "in the course of business" and "furtherance of business". Legal definitions can be resorted to for these. After a lot of deliberations, I am of the view that the party can prove the usage. No doubt it is not free from litigation but if the party fights legally, the party will win. This is my hunch and observation. In order to avoid penalty, the party can intimate the department after availing ITC.

AI Summary

Input tax credit on capital goods and repairs allowed when incurred for furtherance of business, subject to taxpayer's burden of proof. Input tax credit is allowable where repair, painting or capital goods (including furniture and fixtures) are incurred for the furtherance of business, subject to the claimant bearing the burden of proof and statutory exclusions; many such items are necessary to run a business but may still be disallowed if use cannot be substantiated, and taxpayers should consider notifying the department after availing credit to mitigate penalty risk.