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2023 (10) TMI 473 - AAAR - GSTBlocking of Input Tax Credit - construction of their new administrative office - Central Air-conditioning Plant - Lift - Electrical fittings not for civil construction - Solar Plant - Fire Safety Extinguishers - Architect Service Fees - Interior Designing Fees. Central Air Conditioning Plant - HELD THAT:- As the construction of central air conditioning plant via a works contract service, makes it an immovable properly, it ceases to be a plant and machinery - the ITC on the supply of Central Air Conditioning Plant, ceases to be a plant and machinery & hence, is blocked under Section 17(5)(c) of CGST Act, 2017 as the same is works contract services for construction of an immovable properly. Lift - HELD THAT:- On examining the agreement for supply of lift, it is found that the same falls under the category of ‘works contract’ service as defined under section 2(119) of CGST Act, 2017, as it fulfills the description of the works contract service. The lift would become an immovable property after being erected and installed, as it is attached to the building itself - As the erection, installation and commissioning of lift via a works contract service as pointed out above, makes it an immovable property, it ceases to be a plant and machinery. Thus, in terms of section 17 of the CGST Act, the appellant is not entitled to ITC of GST paid on supply of Lift/Elevator. Electrical fittings such as Cables, Switches, NCB and other Electrical consumables materials - HELD THAT:- The electrical fittings are mostly concealed into the wall/floor of the building. They are concealed or fitted on to the building through pipes as it serves the dual purpose of safety and aesthetics. The supply of electrical fittings involves its installation also, The supply therefore falls under the category of ‘Works Contract Service’, further on installation of the electrical fittings it becomes part of the building and thereby an immovable property - the supply of electrical fittings after installation and commissioning becomes part of the building i.e. immovable property and thus in terms of section 17 of the CGST Act, the appellant is not entitled to ITC of GST paid on Electrical fittings. Roof Solar Plant - HELD 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 the applicant is eligible for input tax on roof solar plant. Fire Safety Extinguishers - HELD THAT:- There is an intention to install the ‘Fire Safety Extinguishers’ permanently to the building. The Fire Safety Extinguishers once fitted, no longer remains movable goods as it gets assimilated in a permanent structure i.e. the administrative building of the appellant. As the supply and installation of fire safely extinguishers as pointed out above, makes it an immovable properly, it ceases to be a plant and machinery - 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. Architect Service Fees - Interior Designer Fees - HELD 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. As is evident, AS 10, prescribes capitalization of professional fees, meaning thereby that in this case both these services viz. architect service fees and interior designer Fees, should in terms of the accounting standards be capitalized. The averment therefore that since they are booking a capital expense under Profit and Loss account will make them eligible for ITC, is not a legally tenable argument - the appellant is not entitled to ITC of GST paid on Architect Service Fees and Interior Designing Fees in view of the provisions of Section 17(5)(d) of the CGST Act, 2017. Appeal dismissed.
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