The Tribunal held that since the GST component on furnishing invoices was not added to the cost of fixed assets or capitalised, the restriction under Section 17(5)(d) does not apply.
The GSTAT Thiruvananthapuram Bench has set aside the denial of ITC on four invoices for joinery, carpentry, and painting services received by Oxygen The Digital Shop, a retail partnership firm dealing in digital gadgets, for furnishing its rented showrooms. [Oxygen The Digital Shop v. Commissioner of Keralam State GST, Thiruvananthapuram]
Vice President Subramanya Rayaprol and Member (Technical) Ramamoorthi Sriram found that the Explanation to Section 17(5)(c) and (d) triggers the ITC restriction on construction, renovation, additions or alterations only to the extent of capitalisation to the immovable property.
The appellant produced a Chartered Accountant certificate confirming that the furnishing expenditure was capitalised under "Furniture and Fixtures" (a movable asset block), while the GST component was not added to the cost of fixed assets, was accounted for separately as ITC, and no depreciation was claimed on the tax component. Since the GST amount was not capitalised, the Tribunal held that it did not fall within the restricted category of Section 17(5)(d).
The Tribunal also noted that the show cause notice had not raised any dispute about the classification of services at the supplier's end, and therefore the Revenue's attempt to reclassify them at the buyer's end was beyond the scope of the SCN.
2026-juristway.com-3036-GSTAT(Thiruvananthapuram)-GST | GSTAT Thiruvananthapuram | APL/15/TVP/2026 | 16.10.2026
