2026-VIL-224-GSTAT-TVP
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  2. 2026-VIL-224-GSTAT-TVP

SGST Tribunal

GST - Input tax credit on interior work in rented showrooms - Restriction under Section 17(5)(d) of the CGST Act, 2017 and Explanation 1 thererto - Extent of capitalisation - The Appellant-retail trader availed ITC on invoices for joinery, carpentry and painting services used for setting up wooden and glass shelves in showrooms taken on rent, and the ITC was denied as restricted under Section 17(5) of the CGST Act. The Appellant produced a CA certificate stating that the expenditure was capitalised under furniture and fixtures, that GST charged on the invoices was not added to the cost of the assets, that it was accounted separately as ITC, and that no depreciation was claimed on the tax component - Whether the Appellant is entitled to ITC on the invoices or whether the credit is restricted under Section 17(5) - HELD - The services were procured for interior work of the shops used for the retail business, which is in direct relation to furtherance of business, and ITC is available under Section 16(1). Explanation 1 to Section 17(5)(c) and (d) provides that the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property - If the Appellant has not capitalised the CGST and SGST portion of the invoices in its books of accounts, it would be eligible for ITC on such additions and alterations to the shop which is its registered place of business. The GST portion of the invoices was excluded from the claim of depreciation and was not capitalised, so that it is not covered under the restricted category of Section 17(5)(d) - The Appellant is entitled to ITC on the said invoices - The order of the FAA is set aside and the appeal is allowed - Classification of supplier's services raised for the first time at appeal - Scope of SCN in ITC dispute - The Appellant availed ITC on invoices issued by the supplier for joinery and carpentry services and painting services in respect of its rented retail showrooms, and the ITC was denied under Section 17(5) - Respondent contended that the services fall under the SAC group of building completion and finishing services as classified by the supplier, whereas the Appellant contended that the services fall under interior design services - Whether the classification of services at the supplier's end can be examined at the stage of appeal in a dispute regarding availment of ITC at the recipient's end - HELD - The SCN issued by the Deputy Commissioner does not raise any dispute about the classification of services provided by the supplier. Once the classification of services at the supplier's end is not disputed, it cannot be raised at this stage when the issue is only regarding availment of ITC at the buyer's end. The Tribunal is not inclined to go into mere allegations which are beyond the scope of the SCN - The classification of services is not examined and the issue is confined to the eligibility of ITC.
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