TaxTMI 
TaxTMI 
2024 (2) TMI 553
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.... Present for the Respondent: Shri Anil Kumar Dugar, Advocate Present for the State Revenue Authority: Shri Debabrata Bhowmik, Joint Commissioner of State Tax, Shibpur Charge An Appeal filed under Section 100 (1) of the West Bengal Goods and Services Tax Act, 2017/ Central Goods and Services Tax Act, 2017, by Shri B Mahesh Babu, Assistant Commissioner, Shibpur Division, Howrah CGST & CX Commissionerate, in the matter of Mindrill Systems and Solutions Private Limited having GSTIN: 19AAECM3065G1ZG carrying on business under the trade name of Mindrill Systems and Solutions Private Limited at Domjur Mahiary Road, PO: Begri, Opposite Saraswati Complex, Howrah - 711411 against the Ruling passed by the West Bengal Advance Ruling Authority v....
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....ion expenses are a) capitalized in books, and, b) not capitalized in books 4. The respondent taxpayer (i.e. applicant in WBAAR) contended before the WBAAR that as per provisions of clause (d) to sub-section (5) of section 17 of the GST Act, registered persons are ineligible for claiming ITC on inward supplies of goods or services used for construction on account of own use and such provisions will not extend to including construction of immovable property for use by lessee or tenant. 5. The respondent taxpayer (i.e. applicant in WBAAR) further contended that pre-engineered steel structures were used for construction of the warehouse and thus the said warehouse does not fall within the purview of immovable property. H....
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....cteristics and in absence of mobility like other goods, would be regarded as an immovable property. Further, admissibility of input tax credit to the extent of capitalization in the books of accounts was also not a subject of discussion in the Safari Retreat case. WBAAR thus found that the aforesaid case was not identical with the case being dealt with and opined that the ratio of the aforesaid judgment was not applicable to the present case. 7. WBAAR therefore held that the restriction under clause (d) of sub-section (5) of section 17 of the GST Act in respect of input tax credit on goods or services received by the applicant for construction of warehouse is applicable in the instant case i.e., the applicant is not eligible for credit o....
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.... in form of a warehouse to let it out to M/s Zomato Hyperpure Private Limited. Hence, irrespective of whether the construction expenses have been capitalised or not, the input tax credit shall not be available to the applicant taxpayer. 9. The Appeal petition was heard on 03.10.2023 in virtual mode and subsequently on 08.01.2024 on physical hearing mode on request of the respondent. Both the Appellant and the Respondent tax-payer along with the State Revenue Authority were asked to file their written submissions regarding the issue under consideration. 10. The appellant gave further written submission wherein he reiterated the submissions made in the Appeal application. 11. The respondent taxpayer filed a written submission wherein....
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.... GST Act, the tax-payer is entitled to claim ITC on non-capitalised construction/ reconstruction / renovation / additions / alterations / repairs expenses relating to godown / warehouse given on rent. 12. The State Revenue Authority also filed a written submission wherein they expressed their complete agreement with the order/ruling passed by the WBAAR. They also mentioned that the concerned taxpayer issued invoice for supply of services to M/s Zomato Hyperpure Pvt. Ltd. Mentioning SAC as 997212 (Rental or Leasing services involving own or leased non-residential property) under Real Estate Service (9972). By supplying real estate service, the applicant himself established the nature of such property is immovable one. So, revenue also ech....
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....ailable in respect of works contract services or goods or services or both received for construction of an immovable property. Therefore, for the purpose of construction, the law is unambiguous in the main clauses (c) and (d) to sub-section (5) of section 17 of the GST Act that Input Tax Credit will not be available and thus it will be a blocked credit. It is only the Explanation part, where the law extends the ineligibility criteria for Input Tax Credit to the arena of re-construction, renovation, additions, alterations or repairs and that too conditionally, i.e. Input Tax Credit for such portion of the expenses pertaining to re-construction, renovation, additions, alterations or repairs which are capitalized stands ineligible. 16. The ....