ITC NOT ELIGIBLE OF GST ON INPUT & INPUT SERVICES USED FOR CONSTRUCTION OF COMMERCIAL IMMOVABLE PROPERTY, SUBSEQUENTLY USED FOR RENTING

ITC NOT ELIGIBLE OF GST ON INPUT & INPUT SERVICES USED FOR CONSTRUCTION OF COMMERCIAL IMMOVABLE PROPERTY, SUBSEQUENTLY USED FOR RENTING

MAHARASHTRA AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Name: In re Ashish Arvind Hansoti (GST AAR Maharashtra)
Advance Ruling No.GST-ARA- 88/2019-20/B-30
Date of Judgement/Order: 12th March 2020

Question: Whether applicant is eligible to claim input tax credit of GST paid on input & input services used for construction of commercial immovable property, subsequently used for renting?

Answer: Answered in the negative.

INPUT TAX CREDIT NOT ADMISSIBLE ON CONSTRUCTION OF IMMOVABLE PROPERTY USED FOR BUSINESS

However, we find that the department has filed an appeal against the said judgement of the Hon’ble Orissa High Court, in case of Safari Retreats Private Limited Vs Chief Commissioner of Central Goods & Service Tax, which is presently pending. The Hon’ble Supreme Court, in the case of Union of India V/s West Coast Paper Mills Ltd., as reported [2004 (164) ELT375 (SC)], has held that once a special leave to appeal is granted and appeal is admitted, correctness or otherwise of judgement of Tribunal becomes wide open and, in such appeal, Court is entitled to go into both questions of fact and as well as law and correctness of judgement is in jeopardy. Appeal is considered to be a continuation of suit and a decree becomes executable only when the same is disposed by the final Court of Appeal.

Hence in view of the above, we are of the opinion that since the case of M/s. Safari Retreats Pvt. Ltd. is pending with the Hon’ble Supreme Court, has not attained finality. We also find that the Hon’ble High Court has given the relief to the party invoking its writ jurisdiction while categorically holding that they are not inclined to hold Section 17(5)(d) to be ultra vires. Therefore, we are not relying upon the judgement of the Hon’ble High Court.