TMI Blog2020 (3) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... the course or furtherance of business. In the present case, the applicant constructed the building/warehouse which is a immovable property and as per the exclusion clause 17(5) (d)of CGST Act, 2017, the input tax credit is not available on the goods and services used in construction of immovable property. The Section 17(5) of CGST Act is an exclusion clause in spite of the goods or services used in the course or for furtherance of his business as the Section 16 of CGST ACT, it is clearly mentioned that the entitlement of ITC is subject to the condition and restriction. The view of applicant that they are entitled for ITC in view of Section 16 is incorrect as per law - Further the applicant stated that if the ITC is not allowed as per the Section 17(5) (d) then it is unwarranted, unreasonable, arbitrary, unconstitutional, illegal, violation of fundamental right, double taxation is baseless as the Section 17(5)(d) of CGST Act is very clear and there is no scope of interpretation but in spite of clearcut law, the Applicant has wrongly interpreted the Section to avail the benefit of inadmissible ITC. The submission of Applicant that if ITC is not admissible, it would render bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hya Pradesh) (hereinafter referred to as the Applicant) is a partnership firm engaged in providing Clearing and forwarding Agent Service. As a C F Agent, the firm stores goods of other company and charges Rent for the same. The firm has a two GSTR number, one for the unit located in Jabalpur(M.P.) other for the unit located in Raipur(C.G.). The Revenue from operation of the firm consists of the following:- (i) C F Commission, (ii) Warehouse Rent and (iii) Other reimbursement freight etc. 3.2 The Applicant is having a GST registration with GSTIN 23AABFU3009I1ZD . QUESTION RAISED BEFORE THE AUTHORITY 4.1 Whether ITC of GST paid on goods purchased for the purpose of construction maintenance of Warehouse such as Vitrified Tiles, Marble, Granite, ACP sheet, Steel Plates, TMT Tor(saria), Bricks, Cement, Paint and other construction material can be claimed in full? 4.2 Whether ITC of GST paid on work contract service received from registered unregistered Contractor for construction maintenance contract of building can be claimed in full? 4.3 Whether ITC of GST paid on goods purchased works contract service received during the FY 2017-18 for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent where the immovable property is constructed for the purpose of letting out the same, because, in that event the tax chain is not broken and on the contrary the construction of building will result in a fresh stream of GST revenues to the exchequer on the rentals generated by the building. The denial of input tax credit in such a situation would be completely arbitrary, unjust and oppressive and would be directly opposed to the basic rationale of GST itself, which is to prevent the cascading effect of multi-stage taxation and the inevitable Increase in costs which would have to be borne by the consumer at the end of the day. (iii) That interpretation of Section 17(5)(d) that the ITC not allowed leads to double taxation, i.e. firstly, on the inputs consumed in the construction of the building and secondly, on the rentals generated by the same building. It is also a settled principal of interpretation of tax statutes that interpretation should be adopted which avoids or obviates double taxation. This principal is also directly applicable to the present case. It would also be violative of the applicants fundamental right to carry on business under Article 19(l)(g) of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Explanation .- For the purposes of clauses (c) and (d), the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; Explanation .- For the purposes of this Chapter and Chapter VI the expression plant and machinery means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes ,- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. 7.4 As per the Section 16 of CGST Act, 2017, every registered person shall entitle for ITC subject to such conditions and restriction as may be prescribed. As per the Section 17(5) of CG5T Act mentioned above, the Input tax credit shall not be available on the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods and services received and used in the construction of warehouse used for letting out on rent as per the Section 17(5)(d) of CGST Act, 2017. 8. RULING (Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) 8.1 We hold that no ITC of GST paid on goods purchased for the purpose of construction maintenance of Warehouse such as Vitrified Tiles, Marble, Granite, ACP sheet, Steel Plates, TMT Tor (saria), Bricks, Cement, Paint and other construction material is admissible under Section 17(5) of CGST Act, 2017. 8.2 We hold that no ITC of GST paid on work contract service received from registered unregistered Contractor for construction maintenance contract of building is admissible under Section 17(5) of CGST Act, 2017. 8.3 We hold that no ITC of GST paid on goods purchased works contract service received during the FY 2017-18 for the purpose of construction maintenance of Warehouse is admissible under Section 17(5) of CGST Act, 2017. 8.4 The ruling is valid subject to the provisions under section 103 (2) until and unless declared void under Section 104 (1) of the GST Act. - - TaxTMI - TM ..... 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