Credit of Renovation expenses done in a shop

[Pradeep Singhi]

Whether credit can be taken for renovation expenses done in a shop ?

AI Summary

Can GST Credit Be Claimed for Shop Renovation? Eligibility Depends on Capitalization and Expense Reporting Practices. A query was raised about whether Goods and Services Tax (GST) credit can be claimed for renovation expenses in a shop. It was advised that credit is possible if the expenses are not capitalized and are shown as revenue expenditure. For rented shops, expenses are not capitalized to immovable property, making them eligible for credit. If the shop is owned, eligibility depends on whether expenses are capitalized or charged to the Profit and Loss account. Capitalized expenses are ineligible, while those charged to P&L are eligible. The distinction between capital and revenue expenditure was also discussed, emphasizing the duration of benefit as the determining factor.