QUESTION
 

I am rendering Renting of Immovable property service. I have to maintain my building for say water proofing and changes of glasses. Unless the building is in good condition no tenent will take my service. On this back ground can I avail, take use I T C on works contract service and on the purchase and changing the window glasses

ANSWER  
 

Facts of the case:  A person is rendering Renting of Immovable property service. Whether ITC is eligible on works contract service and on purchase of window glasses for waterproofing and changes of glasses for maintenance of building. 

Law Applicable: SECTION 17 OF CGST ACT

(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:- --------------------------------------------

(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;

      Explanation. ''For the purposes of clauses (c) and (d), the expression 'construction' includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property; 

Interpretation: Section 17(5) restricts ITC 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 to the extent of capitalization. 

The word Construction here includes  re-construction, renovation, additions or alterations or repairs.

Therefore  ITC on repairs (works contract service and on the purchase and changing of window glasses) is not eligible to the extent of capitalization.

If the amount of repairs is not capitalized then the ITC on same will be eligible.

Conclusion: ITC on works contract service and on the purchase and changing of window glasses can be availed to the extent repairing is not capitalized(Reply dt.26.11.2020)