Is ITC Allowable on Lift Purchased for Use in Hotel
The learned author seeks to examine the issue of allowability of ITC on lift purchased by a hotel for use in the course of furtherance of business. The related issue is being discussed in the light of relevant statutory provisions and an AAAR decision in Jabalpur Hotels Ltd's case.
1. Allowability of ITC under GST
Section 16 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with eligibility and conditions for taking input tax credit. As per sub-section (1) of section 16, every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business.
Section 17 of the CGST Act deals with apportionment of credit and blocked credit. Sub-section (5) of section 17 contains the list of goods and services on which input tax credit shall not be available.
As section 17(5)(c) of the CGST Act, input tax credit is not allowable on works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service.