TaxTMI 
TaxTMI 
2020 (5) TMI 388
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....ED, 1St Floor, Embassy Point, Infantry Road, Bengaluru 560001 (herein after referred to as Appellant) against the advance Ruling No. KAR/ADRG 102/2019 dated 30th Sept 2019 = 2019 (10) TMI 1018 - AUTHORITY FOR ADVANCE RULING, KARNATAKA. Brief Facts of the case: 3. The Appellant is a private limited company engaged in providing shared workspace/Office Space to the freelancers, start-ups, small businesses and large enterprises. The Appellant provides a "space-as-a-service" membership model wherein it offers individuals and organizations the flexibility to scale work space up and down a sneeded, with the ability to consume space by the minute, by the month or by the year. The Appellant business model offers their members, 24/7 access to their locations, beautifully designed workspaces, flexible workspace configurations as needed, a common set of amenities, on-site community teams, a growing number of value- added products and services and a member experience powered by technology. 4. The Appellant 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.....
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....t to its members and thus qualifies to be used in the course or furtherance of Applicant's business. They submitted that Section 16 details the criteria of availment of ITC on tax paid on input and input services; that Section 16 of the CGST Act entitles every registered person to take input tax credit of tax charged on supply of goods or services or both which are used or intended to be used in course or furtherance of business; that while business has been defined under the CGST Act, the terms "in the course" or "furtherance of business" are not defined anywhere under the CGST Act or the CGST Rules made thereunder. "In the course of 'generally means something "in the progress of process of that the meaning of "Furtherance" as per Black's law dictionary: 6th edition 11th reprint 1997, is "act of furthering, helping forward, promotion, advancement or progress"; that "furtherance of business" will, thus mean, act of furthering business, helping forward business, promotion of business, advancement of business or progress of business; that the Appellant is into the business of constructing physical shared spaces and office services. Given that the Appellant procures detachable sliding....
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....t's co-working common areas get access to that location's amenities. In such cases, no glass partition is created for hot desk member. Various Hot desk members can use any desk across the common area together. * DEDICATED DESK - A dedicated desk is one that is always reserved for the member. Dedicated desks come equipped with a chair, trashcan, and and lockable filing cabinet - akin to a permanent desk provided by the Appellant. In these cases, there will be no glass partition to separate offices for different dedicated desk members. There will be are served area where members will use their specific dedicated desk. * PRIVATE OFFICES - An office with enclosed spaces for teams of one to 100 or more, with access to all amenities. In such cases, glass partitions can be removed or placed as required by the members. If a certain member requires a small private space, a glass partition can be placed swiftly. On the other hand, if a member requires a bigger private space, glass partitions can be removed. The Appellant therefore submitted that it is clear from the above business model, that fixture of glass partitions can be made very quickly. Any and all alterations can be made in ca....
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..... And hence, credit respect to various plant and machinery is admissible as per Section 16 of the CGST Act. They also submitted that the Hon'ble Orissa High Court in the case of Safari Retreats Pvt. Ltd. and Anr. V. Chief Commissioner of Central Goods and Service Tax and Others = 2019 (5) TMI 1278 - ORISSA HIGH COURT allowed the ITC of goods/services used for construction of shopping mall meant for letting out. Since the facts of the decision as held by the Hon'ble Orissa High are similar to the facts of the present case, the Appellant is rightly entitled for credits with respect to the impugned goods. 7.6. Further, the Appellant also submits that the provision of Section 17(5)(d) restricts credit with respect of construction, only when capitalized as immovable property, since 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. They submitted that, so far the business activity of the Appellant is concerned, such fixtures of partitions are not capitalised as immovable property but are in fact recorded as 'furniture and fixtures', since the glass pa....
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....nd fixture", and is not capitalized as an immovable property, must be allowed and eligible to the Appellant. 7.8. The Appellant also submitted that as per Section 100 of the CGST Act, the present appeal ought to have been filed on or before November 10, 2019, i.e, thirty days from the date of receipt of order. However, as per the same Section, a condonation can be requested for another thirty days, which expires on December 10,2019. They submitted that the delay in filing the present appeal was on account of the fact that the impugned order is passed partially in favour of We Work; that deliberations with the parent company and relevant stakeholders took a considerable amount of time. They requested to accept the appeal, since it is within the condonable period and is being filed before December 10, 2019. PERSONAL HEARING: 8. The Appellants were called for a personal hearing on 31st January 2020 but the same was adjourned to 24th February 2020 on their request. The Appellants were represented by Shri. Vinayak Parameshwaram, Authorized Representative who reiterated the submissions made in the grounds of appeal. They also emphasized the fact that the glass partitions are only scre....
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.... in the books of accounts they are not eligible for the input tax credit on the above said items. 12. Section 16(1) of the CGST Act, 2017 provides as follows: "16.(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person". The generalized interpretation of the aforesaid Section implies that the appellant is entitled to credit of input tax charged on any supply of goods and/or services made to the appellant and used by the appellant in furtherance of his business. However, this is subject to the conditions and restrictions as specified in Section 16(2) and Section 17 (5) of the CGST Act, 2017. Section 17(5) of the CGST Act, 2017 stipulates the situations wherein input tax credit shall not be available notwithstanding anything contained in Section 16(1) of the said Act. We are concerned with the provisions of clause (d) of Section 17(5....
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....the General Clause Act, 1897 as including land, benefits arising out of land, and things attached to the earth, or permanently fastened to anything attached to the earth." "Attached to earth" is defined in section 3 of the Transfer of Property Act as meaning (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. In case of fixtures like the glass partitions, the rule is permanent attachment, that is, such attachment, whereby, removing the item in question will require demolition. To ascertain whether the item is permanently attached to earth, many courts have consistently used two-fold tests - (i) the extent of annexation and (ii) the object of annexation. The extent of annexation means annexing the fixture or object by which it ceases to be detachable. It would need to be demolished if one were to remove it. The object of annexation test lays down that where a movable property gets annexed with an immovable property, if the intent of annexation is of permanent beneficial enjoyment of the ....