Page 137 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : JABALPUR HOTELS PVT. LTD. 71
has been used in the course for furtherance of business”. Since the question is squarely
covered under Section 97(2)(d) of the CGST Act, 2017, we admit the application
and take up the matter for pronouncing ruling.
7.3 The applicant is a Private Limited Company which has started con-
struction of a Hotel in Jabalpur, as already discussed in the foregoing paras. It
has been mentioned that the proposed hotel would have more than 100 rooms
along with other facilities like gym, spa, swimming pool, banquet, restaurant etc.
The applicant has mentioned that the hotel is a multi-storeyed building and,
thus, the provision of lift is essential for running the business. It has been men-
tioned that the room tariff of some of the rooms is proposed to be more than Rs.
7500/- and therefore the restaurant would be paying GST @ 18% and availing
input tax credit on goods and services used in course or for furtherance of busi-
ness.
7.4 The applicant have sought ruling on availability of input tax credit
of tax paid on Lift purchased and installed by the applicant in the hotel building,
particularly with reference to blocked credit as defined under the provisions of
Section 17(5) of the GST Act. The application, inter alia, mentions that the said Lift
is being capitalized in the books of the company and depreciation as per the pro-
visions of Income 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 controverting the provisions of Section 16(3) of CGST Act, 2017. It is
therefore pleaded that the lift in question be termed as “Plant & machinery’ and
hence out of purview of blocked credit in terms of Section 17(5)(d) inasmuch as
‘Plant & Machinery’ has been excluded from the definition of immovable proper-
ty.
7.5 Now, we observe that Section 17(5)(d) reads as under :
SECTION 17(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 -
(a) -----------
(b) -----------
(c) -----------
(d) Goods or services or both received by a taxable person for
construction of an immovable property (other than plant and
machinery) on his own account including when such goods or
services or both are used in the course or furtherance of busi-
ness.
7.6 Thus, the 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 intended 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. We don’t see
any ambiguity in the words of the statute to this extent. We feel that the appli-
cant is also on the same page with us that any goods or services used in construc-
tion of an immovable property shall not qualify for availment of input tax credit
in terms of this Section 17(5).
7.7 To avoid the event of blocking of credit in terms of Section 17(5)(d),
the applicant have argued that the impugned item ‘Lift’ merits classification as
‘Plant and Machinery’ and since ‘Plant and Machinery’ is excluded from the term
GST LAW TIMES  3rd September 2020  153