ITC on Building Repair and Maintenance is a matter of confusion among various professionals and subject to litigation.
We will discuss in detail regarding the provision of Building Repair and Maintenance and how to avail the ITC for the same.
Building repair work:
We can avail the ITC on building repair and Maintenance, but ITC will not be available to the extent of capitalization. It clear implies that if we are not capitalizing, we can claim the ITC on building repair and Maintenance.
For example, ABC Ltd paid GST on building materials, such as cement, marble, paint and other building material meant form repair of building. ITC will be allowed if they are not capitalizing the same.
For example, ABC Ltd hires labour to carry out the building repair and maintenance work where material is provided by ABC Ltd. ITC will be allowed on labour supply if they are not capitalizing the same.
For example: ABC Ltd hires contractor for complete work of building repair and maintenance. Where material as well as labour is provided by contract. ITC will be allowed if they are not capitalizing the same.
Repair work related to electric installation and Sanitary fittings:
We can avail ITC on electrical fittings such as switches, cables, MCB and other electrical consumable meant for repair of electrical fittings.
But ITC will not be available to the extent of capitalization. It clear implies that if we are not capitalizing, we can claim the ITC on repair work related to electric installation and sanitary fittings.
For example, ABC Ltd paid GST for repair work of electrical fittings. ITC will be allowed if they are not capitalizing the same.
For example, ABC ltd paid GST on sanitary fittings, such as tiles, wash basin, PVC pipes and other bathroom sanitary fittings meant for repair of existing sanitary fittings. ITC will be allowed if they are not capitalizing the same.
Furniture and Fixture Repairing Work:
We can avail ITC on wood, paint, polish and other consumable meant for repair of existing furniture & fixtures.
But ITC will not be available to the extent of capitalization. It clear implies that if we are not capitalizing, we can claim the ITC on repair work related to furniture and fixtures.
For example, ABC Ltd paid GST for renovation of their old conference Room. ITC will be allowed if they are not capitalizing the same.
For example, ABC Ltd hires labour to carry out the furniture repair work for their conference room. ITC will be allowed on labour supply if they are not capitalizing the same.
Provision related to GST paid on building repair and maintenance, engaging labour supply for construction, electrical fittings such as cables, MCB, Switches and other electrical consumable and sanitary fittings is covered under section 17(5) read with explanation mentioned therein. ITC on GST paid on such supply/services as mentioned above will not be available to extent of capitalization of the said supply/service.
So, in view of above facts, we are in view that, we can claim ITC on above repair & Maintenance work if we are not capitalizing the same.
Being routine repairs, the amount spent on the above mentioned all scenarios are charged to revenue as per Accounting Standards.