TaxTMI 
TaxTMI 
2019 (10) TMI 1018
X X X X Extracts X X X X
X X X X Extracts X X X X
....nature and capitalized as "furniture and fixture", and is not capitalized as "immovable property"? b) Whether input GST credit can be availed by the applicant on the detachable sliding and stacking glass partition which is movable in nature and capitalized as "furniture and fixture", and is not capitalizes as an immovable property? 3. The applicant furnishes some facts relevant to the stated activity:- a. The applicant states that he is in the business of supplying shared works pace/office space to the freelancers, start-ups, small businesses and large enterprises. Towards this end, the Applicant procures goods and services from various contractors for fitting-out of the workspaces and provides the said workspace on rent, to various companies and individuals as sharing work-spaces. The applicant states that he has paid GST on the inputs procured. b. The applicant states that however, as per Section 17(5) of the CGST Act, a restriction is imposed with respect to input tax credit (hereinafter referred to as "ITC") on procurement of goods and services or both received by the taxable person for construction of an immovable property. However, the term 'construction' is limited to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly:- (a) ....................... (b) ....................... (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; Explanation,- For the purposes of this Chapter and Chapter VI, the expression "plant and machinery" means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes,- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 Further, the applicant submits that for the purposes of clause (d) of section 17(5) of CGST Act, the expression 'construction' has been defined to include re-construction, renovation, additions or alterations or repairs, to the extent of capitalization of the said immovable property. 4.2.9 The Applicant in this regard submits that, so far as the business activity of the applicant is concerned, such fixtures of floorings and partitions are not capitalised as immovable property but are in fact recorded as 'furniture and fixtures'. They can be detached and re-used and are not considered to be the permanent civil assets. It is for this very reason that the said wooden flooring cannot be capitalized as immovable property. 4.3 Thus, the Detachable 14mm Engineered wood with Oak top wooden flooring is not covered under the definition of 'construction' and consequently is not restricted under Section 17(5). 5. Regarding the second item in question, i.e. Detachable sliding and stacking glass partitions, the applicant states that they qualify as eligible credit under section 16 of the CGST Act and the restriction provided under section 17(5)(d) does not apply for the following reasons: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the earth" are not defined in the GST law, reference can be drawn Section 3 of the Transfer of Property Act, 1882 wherein it is defined that anything:- * Rooted to the earth, as in case of trees and shrubs; * Imbedded in the earth, as in the case of walls and buildings; * Attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. 7. The Applicant, in view of the above, emphasises that the Detachable 14mm Engineered wood with Oak top Wooden flooring and detachable sliding and stacking glass partitions would not fall under the ambit of "Anything attached to the earth" as the Detachable Oak wood flooring are fixed using the streaped foam and detachable sliding and stacking glass partitions are fixed with the help of nuts and bolts to a foundation intended to provide stability to the working of the same. They arc neither rooted to the earth not embedded in the earth nor attached for the permanent beneficial enjoyment as the same can be detached and re-used. 7.1 Detachable 14mm Engineered wood with Oak top wooden flooring procured by the Applicant are movable in nature. 7.1.1. The Applicant in support of the arguments taken above, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in nature as the same can be dismantled and re used. 7.2.2 In this regard, the Applicant submits that in the process of fitting the detachable glass partitions, an aluminium store front is fixed to the structure with the help of nuts and bolts, and to the same, the glass is attached. 7.2.3 Thus, basis the above submissions it is evident that detachable sliding and stacking glass partitions would qualify as a "movable property" as the same can be dismantled and re-used and would clearly qualify for input tax credit. 8. Judicial Precedents in relation to credit admissibility 8.1 In the Advance Ruling issued by the authority for Advance Ruling, Uttarakhand, in the case of M/s. VINDHYA TELELINKS LTD = 2018 (9) TMI 1646 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND, the question was whether the applicant is eligible for input tax credit on goods & services used in erection of infrastructure, which consists of "steel tabular pole, galvanized iron wire, nuts &, bolts, optical fibre cables, plastic pipes, clamps", for telecommunication service providers since the infrastructure provided by the applicant is different from "Telecommunication Tower". It was held that the infrastructure pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s allowed. 8.3 Further Reliance can be placed on the judgement in the case of M/s. Balkrishna Industries Ltd Vs CCE, Jaipur-I = 2016 (1) TMI 383 - CESTAT NEW DELHI wherein it has held that the credit on duty paid on air-conditioners installed in the office of factory is admissible. Further, the goods such as furniture and stationery used in the office within the factory are goods used in relation to the manufacturing business and hence credit is to be allowed on the same. 8.4 The Applicant further places reliance on the Advance ruling issued by the Authority of the advance ruling in the case of Nipro India Corporation Private Limited = 2018 (10) TMI 745 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA where the question was whether the input tax credit of tax paid on cost proposed to be incurred in relation to civil works, mechanical works and electrical works can be admissible under the CGST Act, 2017. It was held that the goods in question are used or intended to be used in course of furtherance is business and as per section 16 of the GST Act "Every registered person subject to such conditions and restrictions as may be prescribed would be entitled to take credit of input tax char....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the applicant is using the goods and services so procured in the course or furtherance of his business of renting the office spaces and the input tax credit is that tax charged on the inward supplies of such goods and services and being a registered person, subject to such conditions and restrictions as may be prescribed, he is eligible to the credit of such input tax credit. 9.3 The relevant provisions of Section 17(5)(d) of the CGST Act reads as under:- "(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- a) .................................. b) ................................. 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 ,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not change its nature being an immovable property. 9.6 On the issue whether the fixing of detachable wooden flooring and sliding and stacking of glass partitions amounts to addition to an immovable property or not, the following points are noted: 9.6.1 The term immovable property is not defined under the GST Act. Section 3(26) of the General Clauses Act, 1897 defines "immovable property" as under:- "immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth." The term "movable property" is defined in section 3(36) of the General Clauses Act, 1897 as under:- "(36) "movable property" shall mean property of every description, except immovable property: Hence, a movable property is one which is not an immovable property. The definition of "immovable property" is an inclusive definition and includes any things attached to the earth or permanently fastened to anything attached to the earth. It is pertinent to note that the office space which is provided is an immovable property and there is no dispute in this regard and these partitions are those which are attached to the bu....