AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 473
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....low for ease of understanding. 4. M/s. The Varachha Co-Op. Bank Ltd., I to 10, Affil Tower, L.H. Road, Surat-395006, Gujrat (hereinafter referred to as 'the appellant'), holding GSTIN: 24AABAT4356N1Z6, submitted that they are constructing a new administrative building and incurring cost on various services. The appellant, further submitted that they were eligible for Input Tax Credit [ITC] on the below mentioned goods and services in view of the foregoing viz: Sr. No. Nature of Cost/ Expenses Head under which expense will be booked Capitalized or not Remark 1. Central Air Conditioning Plant Plant & Machinery Yes Being Plant not covered under Immovable Property & hence ITC available. 2. New Locker Cabinet Locker Cabinets Yes Being furniture not covered under Immovable Property & hence ITC available. 3. Lift Plant & Machinery Yes Being Plant not covered under Immovable Property & hence ITC available. 4. Electrical fittings, such as Cables, Switches, NCB and other Electrical Consumables material Electrical fittings Yes Being Electrical Fittings not covered under Immovable Property & hence ITC available. 5. Roof Solar Plant Plant & Machinery Yes Being Pla....
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....lows: Central Air Conditioning System The appellant had entered into a contract for 'supply & erection' of 'Central Air Conditioning System'. Section 2(119) of the CGST Act, defines 'Works Contract'. The expression 'works contract' is limited to contracts to do with immovable property, which is defined in clause 3(26) of the General Clauses Act, 1897. Section 3 of the Transfer of Property Act 1882, further defines the phrase 'attached to earth'. The supply received by the appellant does not involve assimilation with the property and the work carried out by the supplier is only to make the plant ready for a 'wobble free operation'. Thus, the activity undertaken by the supplier cannot be considered as an 'Immovable Properly' by applying the permanency test. The appellant also relied upon the decision of AAAR of Maharashtra in the case of Nikhil Comforts [2020 (41) GSTL 417 (AAAR-GST-Mah.)] and the ruling in the case of M/s. BAHL Paper Mills Ltd.. [2018 (14) GSTL 306 (AAR-GST)]. Lift The supply of Lift will be booked under the head of Plant & Machinery' in the Books of accounts. The purpose behind attaching Lift to a concrete base was to prevent wobbling of the lift, to secu....
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....so far as inputs/input services' for construction of an immovable property' is concerned and does not apply to capital goods. The restriction provided under section 17(5)(c) & (d) does not apply to procurement of various inputs which are installed in their administrative building. Hence. ITC should be available to the appellant on these goods. Architect Service Fees The appellant appointed architect i.e. Mr. Jignesh Moradiya and M/s. Keystone Consultants, for structural design of building. The explanation under section 17(5) defines the expression 'construction'. In the instant case . the said expenses is not capitalized and is charged to "Profit & Loss Account' and hence ITC is admissible. Interior Designing Fees The appellant has appointed the Interior Designer i.e. M/s. Pankaj Dhakhar & Associates for "Interior Design Development' of building which will be ultimately used for provision of supply of service. In the instant case, the said expenses is not capitalized and is charged to 'Profit & Loss Account' and hence the ITC is admissible. The appellant on the basis of above submissions requested to set aside the ruling issued by the GAAR (to the extent ITC is disallowed)....
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....n the manner specified in section 49, he 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. "Section 17. Apportionment of credit and blocked credits (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. ...... ....... ........ ...... ...... ....... ........ ...... (5) Notwithstanding anything contained in sub-section (1) of section 16 and subse....
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.... severed before supply or under a contract of supply. 14. We now move on to examine the seven disputed supplies for which this appeal is preferred. 15. Central Air Conditioning Plant 15.1 The appellant states that they had entered into a contract for 'supply & erection' of 'Central Air Conditioning System'. Relying on section 2(119) of the CGST Act, which defines a 'Works Contract', the appellant states that works contract is limited to immovable property; that the supply does not involve assimilation with the property; that the work carried out by the supplier is to make the plant 'wobble free for operation' and hence it cannot be considered as an 'Immovable Property' by applying the permanency test. 15.2 A conjoint reading of sections 16(1) and 17(5)(c), ibid, shows that ITC can be availed by a registered person subject to conditions and restrictions prescribed on any supply of goods or services or both, which are used or intended to be used in the course of furtherance of his business. The restrictions imposed [as far as the present context is concerned] is that ITC is not eligible for works contract services when supplied for construction of any immovable property except wh....
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....tiable, the refrigeration/air conditioning system as a whole cannot be considered to be excisable goods. Air conditioning units, however, would continue to remain dutiable as per the Central Excise Tariff. " Taking inference from the above Board's circular we find that the supply of Central Air Conditioning Plant falls under the category of works contract service supplied for construction of an immovable properly. We would also like to rely on the judgement of the Hon'ble Supreme Court in the case of Globus Stores P. Ltd., [2011 (267) ELT 435 (S.C.)] wherein it was held that air-conditioning plant is an immovable property. 3. In the present appeals also, we are concerned with the air-conditioning plant which is the same good as that of Virdi Brothers (supra). The learned counsel appearing for the appellant, however, has drawn our attention to the decision of this court in Commissioner of Central Excise, Ahmedabad v. Solid & Correct Engineering Works -2010 (252) E.L.T. 481. In the said decision, this court had considered the case of setting up of Asphalt Drum/Hot Mix plant. Apart from the fact that the aforesaid good is different from the good in question, even the circular which....
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....'ble Bombay High Court, held that lift/elevator is an integral part of immovable property, viz. [relevant extract]: "9. Having heard the rival contentions and having examined all the citations referred to hereinabove, we are clearly of the opinion that the same shall apply to the facts of this case in full force and item in question being immovable property cannot be subjected to excise under the tariff heading claimed by the Revenue. The case sought to be made out by the petitioner is also covered by the decision of the Government of India in reference, Otis Elevator Company (India) Ltd. 1981 (3) E.L.T. 720 (GOI), wherein it was clearly held that if an article does not come into existence until it is fully erected or installed, adjusted, tested and commissioned in a building, and on complete erection and installation of such article when it becomes part of immovable property,. [emphasis supplied] In view of the foregoing, we find that the lift would become an immovable property after being erected and installed, as it is attached to the building itself. 16.3 As the erection, installation and commissioning of lift via a works contract service as pointed out above, makes it an ....
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.... zero welding which reduces the fragility during high impacts; * that it will have flexibility of setting 4 different angles 10°, 15°, 20°, 25°; that changing the angle once in summer 10° & once in winter 25°, can increase annual generation by around 6-7%. 18.4 In view of the foregoing, it is abundantly clear that the roof solar plant, affixed to foundation via nuts and bolts and which has the flexibility of 4 different angles is not an immovable properly but a plant and machinery, The applicant has further stated that they have capitalized the roof solar plant in their books of accounts, the Roof Solar Plant, as is evident is not permanently fastened to the building. Thus, it qualifies as a plant and machinery and is not an immovable property, hence, it is not covered under blocked credit as mentioned in 17(5)(d) of the CGST Act, 2017. Therefore we hold that the applicant is eligible for input tax on roof solar plant. 19. Fire Safety Extinguishers 19.1 The appellant has entered into agreement for supply and installation of 'Fire Safety Extinguishers' in their building premises, the appellant has submitted that in terms of sections 18, 19, 20 & 21 of Th....
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....ove discussions we find that the appellant is not entitled to ITC of GST paid on Fire Safety Extinguishers in view of the provisions of section 17(5)(c) of the CGST Act, 2017. 20. Architect Service Fees and Interior Designer Fees 20.1 The appellant has appointed Architect who will carry out the structural design of their new administrative building. Further they have also hired the services of Interior Designer who will carry out the interior design of their new administrative building. 20.2 We find that it is undisputed that the services of an Architect and Interior Designer availed is with regard to construction of an immovable properly i.e. the new administrative/office building of the appellant. 20.3 The, appellant, we find has contended that the expenses related to Architect services and interior Designing fees is not being capitalized and is charged to Profit & Loss Account, to further substantiate their claim for availment of ITC. We find that Accounting Standards [AS] 10 issued in terms of Section 133 of the Companies Act, 2013, prescribe the accounting treatment for property, plant and equipment. AS 10, states as follows: [https://www.icai.org/www.icai.org/post/account....