Home Case Index All Cases GST GST + AAR GST - 2019 (10) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 1391 - AAR - GSTInput Tax Credit - inputs/ capital goods used or intended to be used for creation of covered logistics facility space (warehouse) to be rented out for storage purposes - inputs in form of goods and services be eligible if the goods and services are consumed and used in construction of covered logistic facility space when the said Input Tax Credit would be utilized in order to discharge and pay CGST and HGST/ IGST on rent received from tenants of the warehouse - section 16 and 17 of the CGST Act, 2017 - HELD THAT:- Section 16(1) of the CGST Act reads every registered person shall, subject to such conditions and restriction as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person - Section 17 (5) (d) of the CGST Act reads goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Section 16 entitles a registered person to claim credit of input tax charged on any supply of goods or services to him whereas Section 17 is an overriding provision to Section 16. Section 17(5)(d) clearly spells out that the Input tax credit shall not be available in respect of goods and services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Further, as per the explanation to Section 17(5)(d), plant and machinery excludes land, building or any other civil structures - The dictionary meaning of the term 'on his own account' means 'for one's own purpose or for oneself' or "unaided". In this case, the applicant is engaged in the business of providing logistic services including the warehouses. The warehouses are constructed for the applicant's own business purpose i.e. letting out. So the contention of the applicant that the bar provided under Section 17(5)(d) is not applicable to it, is rejected. The Authority for Advance Ruling has gone through the ruling of Hon’ble High Court of Odisha in the case titled M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & OTHERS [2019 (5) TMI 1278 - ORISSA HIGH COURT] where the petitioner paying GST on rental income was held to be entitled to input tax credit. It is important to mention here that while allowing the benefit of input tax credit to the petitioner, the Hon’ble High Court had specifically mentioned that “we are not inclined to hold it to be ultra vires”. Since, the provision contained under section 17 (5) (d) of the CGST Act has not been struck down by the Hon’ble High Court, the applicant cannot be allowed the claim of input tax credit.
|