An Individual is registered under GST on account of letting out commercial property. He does not maintain any books of account.
Is he eligible to get ITC on:-
- Replacement of windows and doors of the let out property. Whether such expenditure is capitalized or not evidenced.
- On painting the commercial building.
In the case of commercial entity, certain expenditure on building owned is treated as revenue expenditure. Can GST department sit on the judgment whether such expenditure should have to be capitalized like what happens in IT proceedings so that they can disallow ITC claim
GST Input Tax Credit Eligibility Hinges on Expense Classification: Revenue vs. Capitalized for Property Renovations An individual registered under GST for letting out commercial property inquired about the eligibility of claiming Input Tax Credit (ITC) for expenses on window and door replacement and building painting. The consensus among the forum participants is that maintaining books of accounts is essential for proving these as revenue expenditures, which are eligible for ITC. If these expenses are capitalized, ITC is not available. The GST department cannot mandate capitalization unless justified, and the burden of proof lies with the taxpayer. Participants emphasized the importance of adhering to legal requirements and maintaining proper documentation to support ITC claims. (AI Summary)
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