Page 131 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : JABALPUR HOTELS PVT. LTD. 65

2020 (40) G.S.T.L. 65 (A.A.R. - GST - M.P.)
BEFORE THE AUTHORITY FOR ADVANCE RULING UNDER GST,
MADHYA PRADESH
S/Shri Manoj Kumar Choubey, Member (SGST) and Virendra Kumar Jain,
Member (CGST)
IN RE : JABALPUR HOTELS PVT. LTD.

Order No. 10/2020, dated 8-6-2020 in Case No. 27/2019
Input Tax Credit - Lift - Purchased and installed in building which
would be used as Hotel for providing taxable service - Hotel building being
immovable property, any input or input service going into its construction
shall not be available for availment of input tax credit - Lift part of a building
and not separate item per se - It has no identity when removed from building
being customized mechanism for transportation, designed to suit specific
building - Upon piece by piece installation, it becomes an integral part of the
building - Buildings and Civil Structures not be covered under term “Plant” -
Lift being part of building and thus fell under exclusion from plant and ma-
chinery - Input tax credit of tax paid on Lifts procured and installed in hotel
building shall not be available to applicant - Section 17(5)(d) and 17(6) of Cen-
tral Goods and Services Tax Act, 2017. - Intent of the legislature is clear to the extent
that it intends to restrict input tax credit on any goods or services which are used or in-
tended to be used in construction of an immovable property, even when such goods or
services or both are used in the course of furtherance of business. Any goods or services
used in construction of an immovable property shall not qualify for availment of input
tax credit in terms of this Section 17(5) - A lift comprises of components or parts (goods)
like lift car motors, ropes, rails, etc. and each of them has its own identity prior to instal-
lation and they are assembled/installed to create the working mechanism called lift. The
installation of these components/parts with immense skill is rendition of service and
without installation in the building, there is no lift. Lifts are assembled and manufac-
tured to suit the requirement in a particular building and are not something sold out of
shelf and in fact, the value of goods and the cost of the components used in the manufac-
turing and installation of a lift are subject to taxation while the element of labour and
service involved cannot be treated as goods. Parts of the lift are assembled at the site in
accordance with its design and requirement of the building which may include the floor
levels and the lift has to open on different floors or otherwise depending upon the re-
quirement. It has to synchronize with the building and each door has to open on the level
of each floor. Therefore, the lift cannot be said to be separate from a Building. Also, it has
to be borne in mind that a lift is not an item that is purchased and sold. [paras 7.6, 7.7,
7.8, 8.1]
Precedent - Advance Authority’s Ruling - No precedential value but
persuasive value. [para 7.9]
Ruling in favour of department

CASES CITED
Commissioner v. Ashok Agencies — 2016 (41) S.T.R. 647 (Tribunal) — Referred ............................ [Para 4]
Commissioner v. India Cements Ltd. — 2014 (310) E.L.T. 636 (Mad.) — Referred .......................... [Para 4]
Commissioner v. Rajasthan Spinning & Weaving Mills Ltd.
— 2010 (255) E.L.T. 481 (S.C.) — Referred .................................................................................... [Para 4]

GST LAW TIMES  3rd September 2020  147