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The Supreme Court on Thursday declared that real estate companies can claim Input Tax Credits (ITC) under the Goods and Services Tax (GST) regime, on costs of construction for commercial structures intended for renting or leasing purposes.
With due respect to the Hon’ble Supreme Court ruling, my personal takeaway is that the ruling seems to have overlooked some crucial aspects (as apparent from para 32) and therefore, a review could be essential. Here are a few points:
CA Pritam Mahure and Associates present their view on the Hon’ble Supreme Court judgment on M/s. Safari Retreat Private Limited. The PPT is given below.
Adv. Pawan Arora, Partner of Athena Law Associates shares his viewpoint on the recent judgment of Hon’ble Supreme Court’s in M/s. Safari Retreats Private Limited on the issue of eligibility of Input Tax Credit (ITC) on inputs used in the construction of shopping mall constructed for giving the units in it for rental purpose.
Synopsis: The Supreme Court held that if construction of a building is essential for supplying services such as renting out, it could fall into the “plant” i.e. exception to section 17(5)(d) of CGST Act. Functionality test will have to be applied to decide whether building is a plant.
The Supreme Court on Thursday (October 3) provided relief to the industry by allowing the benefits of input tax credits (ITC) on construction costs for commercial buildings intended for leasing.
The AAR, Tamil Nadu in the case of In Re. M/s. A Senthil Maharaj ruled that, the ITC is not admissible in case of the Rotary Car Parking System as the said system is permanently fastened and is installed for the purpose of permanent enjoyment.
What is an Input Tax Credit (ITC) It’s the lifeline that keeps the wheels of GST moving smoothly, preventing the…