Page 133 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : JABALPUR HOTELS PVT. LTD. 67
6.5 As there will be some rooms of the hotel which have declared tariff
of more than Rs. 7500 and hence the restaurant of the hotel will be chargeable to
GST @ 18% against 5% and would be eligible for GST credit of items used in the
course or for the furtherance of restaurant services.
6.6 As the hotel is multi-storied, hence to provide facility to guest we
would be requiring lift in the hotel premises.
6.7 Section 16 Chapter V of CGST Act, 2017 lay down the conditions
specified for claiming Input Tax Credit. Lift that will be purchased will full fills
all the conditions of Section 16.
6.8 Section 17 Lay downs certain conditions for Apportionments of
credit and block credits.
6.9 Section 17(5) blocks credit of works contract and goods or services
received by a taxable person for construction of an immovable property (other
than plant and machinery).
6.10 As Lift is a machinery and hence in our opinion does not fall in the
restriction of Section 17(5) of CGST Act, 2017.
6.11 The company Jabalpur Hotels Private Limited is constructing
Hotel Containing approx. 100 numbers of Rooms.
6.12 Lift is an essential part in a hotel and without which it very diffi-
cult to provide best services to our guest.
6.13 Section 17(5) blocks credit of works contract and goods or services
received by a taxable person for construction of an immovable property (other
than plant and machinery).
6.14 As Lift/escalator is a machine and it falls under HSN 8428 and
hence excluded form block credit as specified in Section 17(5).
6.15 As a machine and especially, in view of usage and function it can
be inferred that it is an absolutely must for providing Renting of Immovable
Property Services. I think it conforms to the condition of “in business or further-
ance of business” It does not fall under any exclusion clause. So in our view, ITC
is allowed.
6.16 Question raised before the authority -
Input credit on Purchase of Lift would be available to Hotel as it has
been used in the course or for the furtherance of business.
6.17 Further the assessee begs to submit as under :
(1) Object for Incorporation of Company
(a) As per Memorandum of Association the company Jabalpur
Hotels Private Limited was incorporated with the following
object. Copy of Relevant part of Memorandum of Association
is enclosed as per Annexure N/1.
(i) To carry on the business of hotel, restaurant, cafes,
motel, resort, rest house, guest house, coffee house,
recreation rooms, bars, conference center, leisure cen-
ter, beer house, night club, boathouse, taverns, lodg-
ing-housekeeping, inn owners, boathouse, shikara,
holiday-hut business and game room owners,
grounds and place of amusements, recreation and en-

GST LAW TIMES  3rd September 2020  149