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GST UPDATE – No ITC shall be allowed on Installation /Erection of Elevators

GST UPDATE – No ITC shall be allowed on Installation /Erection of Elevators
 
GST UPDATE – No ITC shall be allowed on Installation /Erection of Elevators Rule’s
AAR Maharashtra
CASE REF:-M/s LAL PALMAS CO-OPERATIVE HOUSING SOCIETY
 
As we are aware of the fact that availability of ITC has always been a question by the department.One such decision comes against the applicant who sought ruling for the availability of ITC on replacement of existing Lifts/Elevators where the contention of the applicant was that the term lift is covered under term equipment as per the explanation to section 17 (5) under the term Plant and machinery. It was argued by petitioner that the ITC on Plant and machinery which is fixed to earth either by foundation or structural support which are used for making outward supply of either goods or supplies , ITC shall be allowed.
However, the judiciary in its decision has held that the Lift shall form an integral part of building structure and shall become part of immovable property as the same is attached to the building itself. Hence,the credit is not allowed.
Keeping in view of the above Ruling it can also be said that the ITC shall also not be allowed on the Centralized AC Units which also forms an integral part of building, Electrical Wiring and fixtures ,DG Sets which cannot be considered separate  from the building or its civil structure. Same view was also taken by the Karnataka AAR in the case of M/s Tarun Realtors Pvt. Ltd.
However, In another case of M/sNipro India corporation GST AAR Maharashtrahas allowed ITC on Air conditioner and chilling unit to be used in medical equipment manufacturing Plants which is required to be used in the production floor to adhere to cleanroom environment conditions where the applicant has also provided the relevant extracts of the  ISO standards.
Our Opinion :-Two important points are coming out of this verdict:-
  1. In this case the society has purchased the lift and used in the building then the credit is not allowed. But if the contractor has undertaken the maintenance contract and purchased the lift then the credit is allowed. He will charge the same from society and credit will be allowed on maintenance. Hence, the credit is passed on to the society. On the contrary, if the society purchases the lift at its own then the credit will not be allowed following this decision. Everybody will follow the first route. It seems that law is governing the terms and conditions of business in India.
  2. Secondly, different Advance Rulingsof different states are taking contrary decisions. It leads to absurd situations. In one case, the author of this update has seen that assesse has shifted his business to another state following the decision in that state. Again the interpretation of law is governing the business. This again underlines the need of centralized Advance Ruling Authority.
 
 
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