Page 138 - GSTL_3rd September 2020_Vol 40_Part 1

72 GST LAW TIMES [ Vol. 40
‘immovable property’, for the purpose of Section 17(5)(d), the applicant shall be
entitled to input tax credit of tax paid on such Lifts. It appears that in pursuit of
input tax credit on lifts, the applicant has travelled beyond the designated route.
Let us put it in perspective. The applicant essentially seeks to avail input tax
credit on lifts which are purchased and installed in the building which would be
used as a Hotel for providing taxable service. Thus, the lifts are sought to be con-
sidered as ‘input’ for hotel building. That being the case, the input tax credit is
blocked unambiguously in terms of Section 17(5)(d), even when ‘such goods or
services or both are used in the course or furtherance of business’. To be more
precise, hotel building being an immovable property, any input or input service
going into its construction shall not be available for availment of input tax credit.
Further, a lift comprises of components or parts (goods) like lift car, mo-
tors, ropes, rails, etc. and each of them has its own identity prior to installation
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 assem-
bled and manufactured 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 manufacturing 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 requirement. It has to
synchronize with the building and each door has to open on the level of each
floor.
The lift therefore becomes part of the building and is not a separate thing per se.
A lift does not have an identity when removed from the Building. Therefore, the lift can-
not 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. It is a customized mechanism for transportation,
designed to suit a specific building. Upon piece by piece installation, it becomes an inte-
gral part of the building.
7.8 Now, considering the alternate argument adduced by applicant to
treat such lift as plant and machinery, we find that this scenario would merit con-
sideration when the lift is being manufactured by someone and inputs or input
services going into manufacture of the lift are in question. In the instant case, the
applicant has procured the customized lift and gotten it installed piece by piece
in the building resulting in the mechanized transportation system called lift.
The explanation below Section 17(6), relating to the expression “plant
and machinery” has included foundation and structural support in the term
“plant and machinery”. It has also been stated that such foundation and struc-
tural support are used for fixing apparatus, equipment and machinery. There-
fore, in the definition, foundation and structures are duly included. Further the
definition has excluded land building and any other civil structure from the def-
inition of the “plant and machinery”. Prima facie, there seems to be contradiction
in the inclusion of “such foundation and structural supports” and exclusion of
“....building or any other civil structures”. This apparent contradiction is howev-
er negated by the fact that the exclusion of the building or civil structure is for
plant and machinery per se, while the inclusion is for foundation and structure is
only to the extent that such foundation and structure is used to fasten the appar-
ent, equipment or machinery to earth. Thus, if the plant and/or machinery is
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