由以下机构裁定：
Hon’ble Appellate Authority of Advance Ruling, West Bengal
In the matter of Assistant Commissioner, Shibpur Division, CGST & CX Vs. Mindrill Systems and Solutions Private Limited (GST AAAR West Bengal) (Appeal Case No. 04/WBAAAR/APPEAL/2023)
The Company constructed a warehouse and let it out. The Company paid the GST on such outward supply. The Company sought an advance ruling from WBAAR that whether the company is entitled to claim ITC on inward supplies received for construction of such warehouse. The Hon’ble WBAAR held that the restriction given under Section 17(5)(d) of CGST Act in respect of ITC on goods or services used for construction of warehouse is applicable in the instant case, i.e., the Company is not eligible for ITC with respect to inward supplies to the extent such expenditure is capitalised. However, where construction expenses are not capitalized in books, the claim of ITC is admissible.
The revenue filed an appeal against the order of Hon’ble WBAAR and contended that relaxation given in explanation to Section 17(5)(c) and (d) of CGST Act is applicable on re-construction, renovation, additions, alterations and repair work only and not the original work. The Hon’ble AAAR, West Bengal held that the condition of capitalization is applicable only in respect of reconstruction, renovation, additions, alterations or repairs Work. Accordingly, the taxpayer shall be entitled to ITC on such expenses if they are not capitalised in the books. However, for the purpose of “construction”, ITC is ineligible in all the scenarios and there is no scope of any other interpretation.
In the given case, the Company has carried out original construction work and therefore, ITC is ineligible under Section 17(5)(c) and (d) of CGST Act.
1. Facts of the case
- Mindrill Systems and Solutions Private Limited（以下简称“公司”或“被上诉人”）在西孟加拉邦建造了一座仓库，并将其出租给 Zomato Hyperpure Private Limited。公司已就此类供应缴纳了商品及服务税。
- 公司向西孟加拉邦预先裁定管理局（WBAAR）申请预先裁定，询问其是否有权就用于建造此类仓库的投入或投入服务申请进项税抵扣。
- 此外，若建设费用符合以下情况，公司是否可以将此类进项税抵扣用于支付仓库租赁应缴的商品及服务税：
- 西孟加拉邦预先裁定管理局裁定，CGST法案第17(5)(d)条规定的限制适用于本案，即公司无权就账目中已资本化的仓库建设相关对内供应申请进项税抵扣。
- 然而，若建设费用未在账目中资本化，则进项税抵扣申请是允许的。
- 税务部门针对该裁定，向西孟加拉邦预先裁定上诉管理局提起了上诉。
2. Advance Ruling by Hon’ble Authority of Advance Ruling, West Bengal
- 公司向西孟加拉邦预先裁定管理局主张，根据CGST法案第17(5)(d)条，注册纳税人无权就用于自身建设的对内供应申请进项税抵扣。
- 然而，此类规定不适用于为承租人或租户使用而建造的不动产。
- 公司进一步援引了奥里萨邦高等法院在 Safari Retreats (P.) Ltd. 诉中央商品及服务税首席专员一案中的判决。
- 在此背景下，西孟加拉邦预先裁定管理局指出：
- 奥里萨邦高等法院审理的问题是确定申请人是否有权就用于建造商场的对内供应申请进项税抵扣。
- 在本案中，建造仓库的目的是将其出租并赚取租金收入。
- 因此，根据事实，仓库本身的建设旨在固定于特定地点，申请人不会将其从一处移至另一处。
- 因此，申请人所建造的仓库因其永久性特征且缺乏其他货物所具备的移动性，应被视为不动产。
- 因此，西孟加拉邦预先裁定管理局裁定，CGST法案第17(5)(d)条关于仓库建设所用商品或服务进项税抵扣的限制适用于本案，即公司无权就账目中已资本化的仓库建设相关对内供应申请进项税抵扣。
- 然而，若建设费用未在账目中资本化，则进项税抵扣申请是允许的。
3. Contention of the Revenue (“The Appellant”)
The Revenue contended following grounds while file appeal before AAAR, West Bengal:
- 公司为建造仓库接收了包括工程合同服务在内的商品及服务对内供应，并将其出租。
- 西孟加拉邦预先裁定管理局将进项税抵扣限制在账目中已资本化的建设费用范围内是错误的。
- GST法案第17(5)(d)条限制了涉及原始建设的不动产建设的进项税抵扣。
- 此外，根据解释，建设工程包括重建、翻新、增建、改建、维修，在这些情况下，进项税抵扣仅限于资本化部分。
- 然而，在本案中，公司进行了仓库形式的原始建设工程。
- 因此，无论建设费用是否已资本化，公司均无权就用于仓库建设的对内供应申请进项税抵扣。
4. Contention of the Company (“The Company”)
The Company made following submissions:
- 税务部门关于无论建设费用是否资本化，根据CGST法案第17(5)(d)条均不得抵扣进项税的论点是不成立的，因为该条款限制的是涉及原始建设的不动产建设的进项税抵扣。然而，该条款中并无“原始建设”的概念。
- CGST法案第17(5)(d)条并未禁止纳税人就用于业务过程或业务拓展的、与不动产或动产相关的非资本化建设、重建、翻新、增建、改建、维修费用申请进项税抵扣。
- 根据对条款的简单解读，显而易见，该条款绝不涉及用于业务过程或业务拓展的、与不动产或动产相关的非资本化费用的进项税抵扣。
- 因此，纳税人有权就出租的仓库/货仓相关的非资本化建设、重建、翻新、增建、改建、维修费用申请进项税抵扣。
5. Legal Provisions
Relevant extract of GST law is reiterated below for ready reference:
“Notwithstanding anything contained in subsection (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:-
(a)….
(c) 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;
(d) goods or services or both received by a taxable person for construction of immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.
Explanation: For the purpose of clauses (c) and (d), the expression construction includes reconstruction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property.”
6. Analysis by Hon’ble AAAR, West Bengal
Hon’ble AAAR, West Bengal made following analysis:
- Section 17(5)(c) and (d) of CGST Act clearly states that ITC is not available in respect of works contract services or goods or services received for construction of an immovable property.
- Therefore, for the purpose of construction, there is clearly states that ITC will not be available.
- However, through explanation, scope of ineligibility has been extended to the arena of re-construction, renovation, additions, alterations or repairs. Such ineligibility is subject to the condition that ITC on such portion shall be ineligible which is capitalized in books of accounts.
- The explanatory part actually is inclusive in nature which explains that the restrictions of ITC given in sub-clause (c)and (d) is also applicable on reconstruction, renovation, additions, alterations or repairs.
- However, the condition of capitalization is applicable only in respect of reconstruction, renovation, additions, alterations or repairs to the said immovable property.
- Therefore, the issue of “capitalization” is applicable only in the Explanation part to the clauses (c) and (d), i.e., only when the question of reconstruction, renovation, additions, alterations or repairs arises.
- Accordingly, the taxpayer shall be entitled to ITC on such expenses if they are not capitalised in the books.
- Whereas, for the purpose of “construction”, ITC is ineligible in all the scenarios and there is no scope of any other interpretation.
- The WBAAR has erred in interpreting the afore-stated provisions by applying the conditions of capitalisation both for construction as well as for reconstruction, renovation, additions or alterations or repairs.
7. Ruling
The Hon’ble AAAR, West Bengal held that:
- In the given case, the company has constructed a warehouse and let it out. As this is a case of construction, provisions of Section 17(5)(c) and (d) shall apply and not the explanation.
- Thus, ITC on such construction shall not be available to the respondent.
