Madhya Pradesh AAR in the case of M/s Jabalpur Hotels Private Limited

Case Covered:

M/s Jabalpur Hotels Private Limited

Facts of the Case:

The company Jabalpur Hotels Private Limited was incorporated on 13th March 2018. With 5000000 Share Holders holding 4970000 shares of Rs. 10/- each.

The company was established with an objective to construct Hotel in Jabalpur at Mauza Ghana Khasara No. 195/14, 195/2, 194 Nagpur Road, Jabalpur.

The company started construction of the Hotel and completed a major part of its work.

The Hotel is in the construction stage and the promoters of the hotel have some doubts on the issues of Input Tax Credit under GST hence preferred to file Advance Ruling before the Authority.

This application sort advance ruling for the input tax credit on Lift used in the hotel.

Question Raised Before the Authority:

Input credit on the Purchase of Lift would be available to the Hotel as it has been used in the course or for the furtherance of business.

Related Topic:
Components of the definition of Plant and Machinery examined by AAR Madhya Pradesh

Observations:

we have carefully considered the submissions made by the applicant in the application, the pleadings on behalf of the applicant made during the course of personal hearing, and the Department’s view provided by the jurisdictional officer.

We find that the extant application seeks Ruling specifically on the solitary question. “Whether input tax credit on the purchase of lift would be available to the hotel as it has been used in the course or 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.

Related Topic:
Madhya Pradesh HC in the case of Akash Garg Versus The state of M.P.

Order:

In respect of the solitary Question, we hold that the input tax credit of tax paid on Lifts procured and installed in hotel building shall not be available to the applicant as the same is blocked in terms of Section 17(5)(d) of the CGST Act 2017, become an integral part of the building.

The ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 1104(1) of the CGST Act.

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