Page 45 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] GST PAID ON MAINTENANCE CHARGES FOR REPLACEMENT OF LIFT J103
relevant portion of the definition of a “works contract” as mentioned in Section
2(119) of the CGST Act, 2017 and further reproduced Section 17 of the CGST Act,
2017 which provides for apportionment of credit and blocked credits.
Applicant have reproduced the definition of a ‘Lift’ and ‘Appliance’ as
Advanced Law Lexicon, the applicant is of the view that -
 Manufacture, Supply, Installation and Commissioning of
Lifts/Elevators is in the nature of Works Contract activity which is
covered under the category of ‘service’ under the GST Act;
 The Lift is an “equipment” which shall be fixed to earth by founda-
tion and structural support and used for making outward supply of
services to its members;
 “equipment” is “plant and machinery” as per the Explanation men-
tioned in Section 17 of the Goods and Services Tax Act, 2017;
 Plant and Machinery is not covered under the blocked list of ITC
u/s. 17; and
 Therefore, applicant is entitled to claim ITC as per the provisions of
the Goods and Services Tax Law.
Observation and findings of AAR :
Applicant plans to replace the existing LIFT/ELEVATOR in their society
building, along with structures. In order to replace the existing lift/elevator, the
society may have entered into contracts for erection and installation of lift in their
building. The erection of lift can be done only inside the building structure as an
integral part of the building in which the lift is installed and commissioned in the
building, it becomes integral part of the immovable property i.e. building. The
lift when installed in the building makes the building fit for occupation and be-
comes a permanent fixture of the building itself. Hence the same will be consid-
ered as an immovable property. The AAR has referred the following case laws :
The Hon’ble Apex Court in the case of Triveni Engg. Industries Ltd. v.
C.C.E. - 2000 (120) E.L.T. 273 (S.C.), clearly laid down that after assembling, on
completion of process of erection, the item becomes a part of the building or an
immovable property.
In the case of Quality Steel Tubes (P) Ltd. v. C.C.E. - 1995 (75) E.L.T. 17
(S.C.), it was held by the Apex Court that erection and maintenance of lifts forms
part of the immovable property.
In the case of Otis Elevator Company (India) v. Superintendent of Central Ex-
cise, 2003 (151) E.L.T. 499 (Bom.) opinioned that the same shall apply to the facts
of this case in full force and item in question being immovable property and refer
Otis Elevator Company (India) Ltd., 1981 (8) E.L.T. 720 (GOI), held that on complete
erection and installation of such article when it becomes part of immovable
property.
In view of the above we have no doubt that the lift would become an
immovable property after being erected and installed, as it attached to the build-
ing itself. Further, Section 16 of CGST Act, 2017 provides for eligibility and con-
ditions for taking Input Tax Credit. Whereas Section 17 of the CGST Act, 2017
provides for apportionment of credit and blocked credits and Section 17(5) is re-
produced as under :-
“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
GST LAW TIMES  23rd July 2020  45