Page 135 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : JABALPUR HOTELS PVT. LTD. 69
(4) Eligibility of Credit
(a) Company is eligible for input tax credit as per provisions con-
tains in Section 16 of CGST Act, 2019.
(b) However certain credits of the company related to construc-
tion activity are blocked as per Section 17(5)(d) of CGST Act,
2017 which specifies “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.
(c) Excluding the above referred credit under Section 17(5)(d)
company is eligible for all other credit of inputs, input ser-
vices and capital goods used in the course or furtherance of
business.
(d) Lift in a hotel is also used in the course or furtherance of
business, as it approximately impossible to run a multi sto-
ried hotel without a lift in the present scenario.
(e) Section 17(5)(d) of CGST Act, 2017 also blocks credit of only
construction of immovable property other than plant or ma-
chinery, hence it is the clear intent of the law makers that they
do not wish to block credits of plant or machinery.
(f) The good, “Lift” falls under HSN 8428 1011/8428 1019. ITC is
admissible. Not hit by Section 17(5) of CGST Act, 2017.
(g) Further the lift so purchased is being capitalized in the books
of the company and depreciation as per the provisions of In-
come Tax Act, 1961 is charged on the cost of lift less eligible
credit of GST. Hence no depreciation is being applied on the
GST portion credit of which is eligible in accordance with the
provisions of Section 16 of CGST Act, 2017 without contro-
verting the provisions of Section 16(3) of CGST Act, 2017.
(h) Having established the above, with specific regard to the eli-
gibility of credits, the Applicant would like to draw attention
to certain judicial pronouncements where it has been held
that Cenvat credit of services used for construction is admis-
sible input. Although these judgments have been pronounced
under the erstwhile Cenvat credit laws, the analogy can be
adopted to understand the eligibility of the same under the
GST laws.
(i) M/s. Rattha Holding Co. Pvt. Ltd. v. Commissioner of
Central Service Tax, Chennai [2018 (9) TMI 1722] -
wherein the Hon’ble Chennai Tribunal held that dis-
allowance of credit of input service used for Con-
struction of buildings is unjustified.
(ii) Commissioner of Central Excise, Vishakhapatnam-II v.
M/s. Sai Samhmita Storages (P) Ltd. (2011 (2) TMI 400)
= 2011 (23) S.T.R. 341 (A.P.) = 2011 (270) E.L.T. 33
(A.P.) - wherein the Hon’ble Andhra Pradesh High
Court held that the assessee used cement and TMT

GST LAW TIMES  3rd September 2020  151