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Lift Service ITC Claim for Embroidery Unit

11 November 2021

Hi Sir,

I have Embroidery Unit and providing Embroidery Service, Last week I repair my building lift can I claim ITC for lift service.

I have GST registered for embroidery.

Thanks in advance.

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8 Replies

Janak Shah (ca) (603 Points)
Replied 11 November 2021

Yes you can provided the building is owned or rented by you and you are the single tenant in the building.

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 11 November 2021

Agree with above comment

Sounik Mukherjee (Area Manager (Taxation)) (101 Points)
Replied 11 November 2021

Please see the provision in GST Laws in relation to the issue -

[Sec. 17. Apportionment of credit and blocked credits.

(1) ……………….

(2)…………………..

----

(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:—

…….

……..

(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 (other than plant or machinery) on his own account including when such

goods or services or both are used in the course or furtherance of business.

Explanation: –For the purposes of clauses (c) and (d), the expression “construction” includes

re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

Therefore, Lift is not Plant and Machinery and therefore GST Input is not permissible

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 11 November 2021

ITC will be available if such repairs is not of capital nature.

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 12 November 2021

Agreed

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Prakash Kochar (Tax Practitioner) (2114 Points)
Replied 24 November 2021

iMMOVABLE PROPERTY BELONGS TO OTHER, AS PER AGREEMENT HE PROVIDED THE CIVIL STRUCTURE FOR FIXING LIFT. .. TENANT AS PER AGREEMENT INCURR THE EXPENSES TO GET LIFT FIXED WITH CONDITION THAT HE WILL TAKE BACK ON TERMINATION OF TENANCY . OR MAY TAKE CONSIDERATION EQUAL TO BOOK VALUE AFTER DEDUCTING DEPRECIATION AS CLAIMED UNDER i TAX . IN SUCH CIRCUMSTANCES WHETHER ITC WILL BE AVAILABLE TO TENANT, AS HE HAS NOT CONSTRUCTED IMMOVABLE PROPERTY NOR HE IS OWNER, BUT LIFT IS PLANT FOR HIS BUSINESS.

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 24 November 2021

There are cases where lift credit was said to be eligible (Service Tax Appeal No. 20494 of 2020 - CESTAT). Also, it is P&M. All repairs whether capitalised or not would be eligible under GST.

Sec 17(5)(c) & (d) restricts ITC when in relation to immovable property. 'Lift' can be disputed as movable property.