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2020 (1) TMI 31 - AAR - GSTUtilisation of Input tax credit - utilisation of credit against purchases of materials construction of building materials - nullifying the cascading effect of taxation - whether ITC against purchases of materials and services used for construction of building (constructed by him) can be claimed and utilized to pay GST on the outward supply of services of renting of the building? HELD THAT:- Section 17 (5) (d) provides that no ITC is available in respect of any goods or services received by a taxable person for construction of an immovable property on his own account even if such inputs and input services are used in the course and furtherance of business - In the instant case the applicant has himself built the marriage hall for which he has received various goods such as cement, steel, sand, tiles, bathroom fittings etc. as inputs and services by architect, labour contractor etc. as input services. He is using the hall to rent out to customers for occasions i.e. for furtherance of his business. Therefore, as per section 17(5) (d), no ITC is available on any goods or services received by him for such construction and the same cannot be claimed by him. The input tax paid on the goods/ services received for construction of an immovable property ‘on one’s own account’ is unavailable. The restriction is provided in the Act which is passed by the Legislature. The power to restrict flow of credit exists under Section 16(1) of the GST Act, which shows a Legislative intent that Input Tax credit may not always be allowed partially or fully - As the suitability and requirement of tax payer varies from person to person, rule/ Act, cannot be changed/ amended accordingly and it is mandatory for the tax payers to adhere the restrictions prescribed in Act and Rule. Thus, no Input Tax Credit is available against any goods or services received by the applicant for construction of the Marriage Hall on his own account even if used in course or furtherance of his business of renting the place.
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