Breaking: Supreme Court allows GST ITC on Construction Costs

The Supreme Court of India in a Landmark Judgement today in matter of Chief Commissioner of Central Goods and Service Tax  vs. M/s Safari Retreats Private Limited has allowed GST Input Tax Credit on Construction Costs, where Building Construction Was Necessary For Renting Out Service.

In this matter, the Hon’ble Supreme Court rejected the contention of the department and accepted the contentions of the assessee whereby it has claimed ITC of GST paid on building construction, where where renting of the building was taxable.

The Court held that if construction of a building is essential for supplying services such as renting out it could fall into the “plant” exception to section 17(5)(d) of CGST Act which provides that ITC cannot be claimed for construction material for immovable property construction.