AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1597
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....27.08.2018 1. BRIEF FACTS OF THE CASE 1. M/s. Jabalpur Entertainment Complexes Pvt. Ltd., Jabalpur, the appellant, has submitted that it is a private limited company operating a Mall and Multiplex in his building. The applicant is having a single GSTIN 23AABCJ6495J1ZA. The applicant is having following four operations in the company. (i). Multiplex (cinemas) - operating a 3 movie screen multiplex and snack bar under movie magic banner; (ii). Mall - applicant owns and operates the south avenue mall and has given space to several brands under rent revenue sharing basis, the applicant is also charging common area maintenance charges from tenants; (iii). Food court operates a food court in the mall which is an air conditioned area with self-serve (dine-in) and takeaway arrangements; (iv). SAM retail operates a franchise apparel retail store within the mall. 2. The appellant has stated before AAR (Authority for Advance Ruling) that he is charging GST on outward supply of goods and services as under: (i). Sale of movie tickets - @28% (on tickets exceeding Rs 100/- in value) or @18 % (on tickets below Rs 100/- in value) (ii). Renting of shops @18% (iii). Common area maint....
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....(5) of GST ACT, 2017. 4. QUESTIONS RAISED BEFORE THE APPELLATE AUTHOURITY FOR ADVANCE RULING (AAAR) The following questions have been posed before the authority with reference to the activity undertaken by the applicant: 1. Whether ITC on GST paid on goods purchased for the purpose of maintenance such as vitrified tiles, marbles, granite, ACP sheets, steel plates, TMT TOR, bricks, cement, paint, chemicals sanitary items like wash basin urinal pots and toilet accessories can be claimed in full; 2. Whether ITC on GST paid on works contract services received from registered and unregistered contractor of building can be claimed in full? 5. Written Submissions of the Appellant: At the outset, the appellant humbly wish to point out that the Authority for Advance Ruling has decided the question No. 3 in terms of clause (c) of Section 17(5) of GST Act, 2017, while in fact it should have been clause (d) of Section 17(5). Similarly, the Authority for Advance Ruling has decided the question No. 4 in terms of clause (d) of Section 17(5) of GST Act, 2017, while in fact it should have been clause (c) of Section 17(5). 1. The appellant wish to reproduce hereunder the provisions of Clau....
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....is humbly submitted that the Authority for Advance Ruling has ignored the above definition of Capital goods given in Sec. 2(19), which is quite relevant for knowing the correct meaning of the expression "to the extent of capitalisation" used in the Explanation to Sec. 17(5). 6. It is humbly submitted that from the definition of Capital goods, the meaning of the expression "to the extent of capitalisation", is quite clear that if the cost of any renovation, alteration or repair of any immovable property (building in our case) is capitalised in the books of account, then it will not be eligible for Input tax credit, however it is also highlighted that the hon'ble High Court Orissa has in its judgment dated 17th April 2019 has even allowed ITC in Capitalization of Malls. As a corollary to above, if expenses pertaining to renovation, alteration or repair of any immovable property (building in our case) are not capitalised in the books of accounts, but are charged to expenditure account, then the same must be eligible for input tax credit. 7. It is humbly submitted that ours is Commercial Building where there is heavy traffic of general public round the year, and due to that its ....
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....ate authority, we wish to refer here Para 5.3 of the impugned order which is pertaining to the opinion of the Jurisdictional CGST Commissionerate about eligibility for ITC in respect of inputs used in maintenance of building. "5.3 ............................ The Jurisdictional CGST Commissionerate has opined that the Applicant does not appear to be entitled to avail ITC on aforesaid items because it has been specifically mentioned in the conditions for non-admissibility of ITC in clause (c) and clause (d) of sub-section (5) of Section 17 of the Act. ............................ Thus, it is clear from clause (d) above, that no ITC shall be admissible to the Applicant in respect of goods or services or both received by a taxable person for construction / maintenance of an immovable property. In the instant case, the applicant has declared that they had used the aforementioned civil items in the repair and maintenance of mall building, which is an immovable property and permanently attached to earth. Therefore it appears that the applicant is not entitled to avail ITC on aforementioned civil items and ITC so availed needs to be reversed by the Applicant." Your honour will ob....
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....on filing an application for advance ruling. Rather the basic purpose is to decide the issue referred by the applicant as per provisions of Sec. 97. It has nothing to do with the compliance of various provisions of GST Act & Rules by the registered person filing an application for advance ruling. This is evident from the provisions of Sec. 97(1) which says that - (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application................ In view of above, if the applicant avails any Input tax credit contrary to the provisions of the GST Act & Rules, then he is liable for penal consequences. But, the Authority for Advance Ruling is not at all justified to state in Para 7.5 of its order that - 14. In support of our eligibility for ITC in respect of Inputs used for maintenance of building, we wish to refer here a decision of Hon'ble Orissa High Court in the case of Safari Retreats Pvt. Ltd. v. Chief Commissioner of CGST (2019) 35 GSTJ 106 (Ori). In the said case petitioners constructed shopping malls for letting them out to numerous lessees. For construction of said Malls various goods and services like Cement, Sand, Steel, Aluminum, ....
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....evenue expenditure. Moreover, normally most of the maintenance expenses are revenue expenditures, as they are of recurring nature, like replacement of broken or damaged tiles, wash basin, toilet seat, etc. These expenses cannot be classified as capital expenditure. 18. It is our humble submissions that all the above submissions are pertaining to the basic issue involved in this appeal that we are eligible for ITC on inputs used for maintenance of building, and which have not been capitalised. Therefore, none of our above submissions should be treated as additional ground. However, even if any of our above submissions is treated as additional ground, then we humbly seek the permission of the Hon'ble appellate authority to kindly admit the same for deciding our appeal on the point of eligibility of ITC on inputs used for maintenance of building, which have not been capitalised. On the point for additional ground, the appellant wish to rely upon the following decided case laws : Ambika Refinery v. Asst. CCT (2012) 20 STJ 629 (MP); National Thermal Power Co. Ltd. v. CIT (2005) 5 STJ 686 (SC); CST v. Jalani Tools (India) Ltd. (2015) 26 STJ 94 (Bom). 19. In the case of Na....
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....ance such as vitrified tiles etc., can be claimed? The goods are being purchased by the appellant for the maintenance of building which is housing his Mall, Theatre, Food Court and a retail apparel store. This transaction falls under clause (d) which stipulates that goods or services or both received by a taxable person for construction of an immovable property on his own account would be ineligible for ITC claim. The word "construction" has been explained by explanation appended to clause (c) and clause (d). As per explanation construction includes "re-construction, renovation, additions or alterations or repairs". The word repair simply means "to restore (something damaged, faulty, or worn) to a good condition. We are sure that that goods purchased for maintenance is nothing but for repair of the building which houses Mall, Theatre, Food Court and Retail apparel store. A building which has become old would certainly require inward supply of goods such as vitrified tiles, Marble, Granite, ACT sheets, Steel Plates, TMT Tor, bricks, Cement, Paint, Chemicals and other sanitary items like Urinal Pots, Wash Basins and Toilet accessories for restoring it to a usable condition. These pur....