Whether dealer can claim input tax credit on centralised air conditioner installed in office, though there is no direct link in outward supply but used in the course or furtherance of business? Whether installation of centralised AC will fall under section 17(5)(c) or (d) of CGST / SGST Act, 2017 or not or ITC credit is available?
In our understanding the Centralized AC system would be regarded as ‘plant and machinery’ and not an immovable property viz building and thus impediment u/s 17(5)(c) / (d) should not apply. However it should be ensured that cost of centralized AC is booked separately as P&M and not included in building cost in the books of accounts to obviate future disputes. Further in case such centralized AC system has been installed in an office / factory etc for business purposes then ITC can be availed. However in case supply of taxable as well as exempt goods / services is being made, ITC reversal will be required as per Rule 42 / 43 of the CGST Rules, 2017.
Team Clearmytax.in