In a recent ruling by the Uttar Pradesh Authority of Advance it was found that the ITC, the input tax credit is not available for the expense incurred on the construction of the complex which is further given for lease.
The KRBL infrastructure limited which is also the applicant offers services like construction of commercial complex and the others like furnishing, fabrication, renovation, and also letting the complex for leasing to the tenants on a rental base. The applicant mentioned that the petition was filed to take note of input tax credit availability
Petitioner seeks for the advance ruling on the problem of whether the petitioner is qualified to avail ITC for expenditure incurred towards civil and interior works in building at distinct floors. As the stated property is moreover utilized for letting out various tenants on the rental grounds to move ahead of the business. Whether ITC on the construction of commercial complex located at plot No. 18 BLOCK C, SECTOR- 153, NOIDA, Gautam Buddha Nagar, Uttar Pradesh, 201301, would be available to the applicant in the concern the provided building is used towards the rent purpose.
Applicant entrusted on the decision of the High court Orrisa for the simplicity of M/s. Safari Retreats Pvt. Ltd., and another V/s Chief Commissioner of Central Goods & Service Tax, Bhubaneswar & others in WP (C) No. 20463 of 2018. In the provided case the party had made the malls that were provided further on lease. “While holding that section 17(5) (d) was not ultra vires the Hon’ble Court ruled that the party was eligible for credit.” We find that the department has furnished the appeal {SLP(C) No. 26696/2019} with respect to the stated decision of the Hon’ble Orissa High Court in Hon’ble Supreme Court, which is currently due. The Hon’ble Supreme Court, in the case of Union of India V/s West Coast Paper Mills Ltd., as reported in [2004 (164) ELT375 (SC)], ruled that once a particular leave to appeal is provided and appeal has admitted the decision of the court is open. The court is entitled to proceed with the questions of fact and the law. In this event, the correctness of the judgment is in danger.
The two judges Vivek Arya and Abhishek Chauhan specified that clauses (c) and (d) of section 17(5) limits Input tax credits for the works contract services and goods or services utilized for the construction of the immovable property. “As such, input tax credit (ITC) of GST paid in relation to ‘civil and interior works in a building located at C-32, Sector-62, Noida and on ‘construction of commercial complex located at Plot No. 18, Block C, Sector-153, Noida does not seem to be admissible.”
