QUESTION

Can we take Input Tax Credit of Curtain, Which we have Capitalze in our Books of Accounts in Head of Furniture and Fixtures. This Curtain we use in our New Office Premises.

ANSWER

Facts of the case: Curtains were purchased for the business. To decide whether ITC of GST on the input can be claimed.

Law Applicable:
As per section 16 (2) of CGST the following conditions must be satisfied for claiming ITC;

"a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

b) he has received the goods or services or both.

Explanation. 'For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services''

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or
otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.

c) 'subject to the provisions of section 41,the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

d) he has furnished the return under section 39: "
(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

Interpretation: For claiming ITC of input, input services and capital goods the above mentioned 4 conditions as per 16(2) of CGST must be satisfied. In addition to this if the ITC is not blocked under subsection (5) of 17 of CGST then it can be claimed.

In the present case, Since the ITC of curtains is not specifically blocked under section 17(5) therefore it can be claimed freely provided that all the conditions of 16(2) are satisfied and depreciation has not been claimed in income Tax on tax component of curtains.

Conclusion: ITC of GST paid on curtains purchased for office can be claimed if the conditions of 16(2) are satisfied provided that benefit of depreciation is not availed in income Tax Act(Reply dt.28-05-2020)