TMI Blog2020 (1) TMI 1597X X X X Extracts X X X X X X X X Extracts X X X X ..... good condition - 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 purchases are being made in own account for repair of building which is immovable property. Where this repair work is carried out by registered or unregistered suppliers by providing services it would qualify for work contract services. Capital Goods have been defined in clause (19) of section 2. It says, capital goods means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business. It simply means that classification of any goods as capital goods would be dependent / at the sweet will of a taxpayer on making entry in his books of accounts. If the value of goods has been capitalised, it would become capital goods and if it is not capitalised, it would not become capital goods - it is entirely at the discretion of a tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all 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 maintenance charges @18% (iv). Sale of food drinks - @5% (without claiming ITC on the purchase of food items and beverages) 3 Further the appellant has stated before AAR that he is claiming ITC of GST paid on following inward supplies of goods services: (i). Movie distributor share bill - movie distributor is raising a bill against revenue share of sale of movie tickets of every movie; (ii). Projector rental bills - the applicant has taken a projector on rent for screening of movies; (iii). Advertising Bill- Relating to Advertisements of Movies published in local Newspapers; (iv). Security agency housekeeping bill - security and housekeeping services which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Clause (c) (d) of Sec. 17(5) and the Explanation to Sec. 17(5). Sec. 17(5) : Notwithstanding anything contained in sub-section (1) of Section 16 and sub-section (1) of Section 18, input tax credit shall not be available in respect of the following, namely : (a) (b) (c) Works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 repair and maintenance cost is higher as compared to any residential building. Moreover, the building was constructed in 2009-10 and now it is about 7-8 years old. Therefore, even due to normal wear and tear, the repair and maintenance is unavoidable. 8. It is humbly submitted that the question raised by us before the Authority for Advance Ruling was as under - Whether ITC of GST paid on goods purchased for the purpose of maintenance such as Vitrified Tiles, Marble, Granite, ACP Sheet, Steel Plates, TMT Tor (Saria), Bricks, Cement, Paint, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 observe from the above opinion of Jurisdictional CGST Commissionerate that in the said opinion there is no any reference or opinion about the expression to the extent of capitalisation , which is very vital for deciding the eligibility for ITC in respect of inputs used in maintenance of building. 12. We also wish to reproduce hereunder relevant extract of para 7.5 of the impugned order, in which also the Authority for Advance Ruling concluded that 7.5 . Thus we find that the materials in question are squarely cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, consultancy service, architectural service, etc. were procured by paying GST. The petitioner was denied ITC of GST paid on various inputs and input services on the basis of provisions of Sec. 17(5)(d) of GST Act. The Orissa High Court held while considering provisions of Sec. 17(5)(d), the narrow interpretation put forward by the respondents is frustrating the very objective of the GST Act, inasmuch as the petitioner has to pay huge amount without any basis. Thus, in the considered opinion of the Orissa High Court if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 National Thermal Power Co. Ltd. v. CIT (2005) 5 STJ 686 (SC), the Supreme Court has held that where it is a question of law or if it has a bearing on the tax liability of the assessee and can be decided from the facts available on record, then there is no reason why such additional ground should not be allowed to be raised even if it has been raised for the first time at the time of hearing. 20. In view of above, it is humbly submitted that the appellant should be eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 purchases are being made in own account for repair of building which is immovable property. Where this repair work is carried out by registered or unregistered suppliers by providing services it would qualify for work contract services. 4. The extent of inclusion of these inward supplies of goods or services or both is limited to to the extent of capitalization . Where these inward supplies of goods is received on own account or where suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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