Input Tax Credit — The issue which is in appeal is limited to the point of eligibility of input tax credit on detachable sliding and stackable glass partitions. The Appellant procures these items for the purpose of creating work spaces which are given out on rent to various companies and individuals as sharing work spaces. The detachable glass partitions are fixed to the ground with the help of nuts and bolt and the same can be dismantled and re-used. They had sought a ruling on the admissibility of credit on the afore said items. The lower Authority denied the input tax credit in terms of Section 17(5)(d) of the CGST Act by holding that the detachable sliding and stackable glass partitions are fixed to the building to create office space and amounts to construction of immovable property; that since the expression ‘construction’ has been defined in the said Section 17(5) to include addition and alternation to the immovable property which have been capitalised in the books of accounts they are not eligible for the input tax credit on the above said items.

we find that the detachable sliding and stackable glass partitions are accounted in the Appellant’s books of account as fixed assets under the head “furniture and fixtures”. They are not capitalised as immovable property but rather as movable assets. The lower Authority has observed that declaring the fixtures under the head “Furniture and Fixtures” does not make the items movable and they continue to be immovable property.

Held that— we do not agree with the lower Authority’s finding on this aspect. The lower Authority has also observed that since there is a certain degree of permanence in the office space provided, it is to be considered as immovable property. We disagree on this aspect also. The intent of fixing the glass partitions is only to provide the clients a certain sense of privacy and for the purpose of demarcation of work space area. There is no permanency in affixing such partitions as the same can be dismantled and re-fixed to signify a change in the dimensions of the work space. The fixing of the partitions to the ground using nuts and bolts only serves to give a false sense of permanency while in reality it is not so. The detachable sliding and stackable glass partitions are movable property and addition /fixing of glass partitions does not amount to construction of immovable property. Therefore, the procurement of detachable sliding and stackable glass partitions will be eligible for input tax credit and will not be hit by the provisions of Section 17(5)(d) of the CGST Act. — Wework India Management Private Limited, In Re… [2020] 22 TAXLOK.COM 106 (AAAR-Karnataka)