TMI Blog2020 (7) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... the said property for giving the same on rent to his customers. 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. Thus, the provisions of Section (17) (5)(d) squarely applies in the subject case and thus the applicant cannot avail input tax credit. The applicant has placed reliance on the judgment rendered by the M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS SERVICE TAX OTHERS [ 2019 (5) TMI 1278 - ORISSA HIGH COURT] . In the said case it is seen that the party had constructed malls which were given 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 - Since the case of M/s. Safari Retreats Pvt. Ltd. is pending with the Hon ble Supreme Court, has not attained finality. It is also found that the Hon ble High Court has given the relief to the party invoking its writ jurisdiction while categorically holding that they are not inclined to hold Section 17(5)(d) to be ultra vires. Therefore, we are not relying upon the judgement of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Equipment Both 9. Labour charges Both 10. Works Contract Pre 2.2 Applicant is involved in construction of immovable property for letting out to various tenants on which GST will be charged under the head renting of immovable property . For the purposes of such construction, huge quantities of materials and other inputs were purchased by applicant and certain input services were also availed against which applicant has paid GST and now wants to avail credit of such GST paid by him, for discharging the output tax liability. 2.3 Even though Section 17 (5) (d) of the CGST Act does not allow ITC in respect of goods and services used for construction of the immovable property on own account, the Section 17 (5) (d) shall not be read in a manner so as to disallow credit where immovable property is used for rendering output taxable service, i.e. renting of immovable property service, as in their case. There is no break in tax chain and because the applicant will be paying output tax in respect of such constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Further as per the credit ledger of the applicant from online portal, total available. ITC at end of Aug 2019 is Rs. NIL. Since the construction activity of the applicant has already been completed, as per Section 95 (a) of CGST/MGST Act, the application is required to be rejected. 3.3 However, if the application is admitted the following submissions are made:- 3.3.1 As per registration certificate and Annexure A submitted, applicant is engaged in the construction of commercial property with intent to sell the same as under construction or as post completion of construction or License the premises to suitable long term licensee . 3.3.2 The activity of the applicant tax payer falls under works contact as defined in subsection 119 of Section 2 of the CGST Act 2017. As per section 17(5) (d) the applicant is not eligible for input tax credit against purchase of goods or services or both received, 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. 3.3.3 In the case of GGL HOTEL AND RESORT COMPANY LIMITED = 2019 (1) TMI 488 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28) Nodal - 6, Mumbai also appeared. We heard both the sides. 05. DISCUSSIONS AND FINDINGS: 5.1 We have gone through the facts of the case, documents on record and written submissions made by both, the applicant as well as the jurisdictional authority. 5.2 From a perusal of submissions made by the applicant, we observe that the applicant has raised the subject question in relation to an activity, i.e. construction of a building on his own account. 5.3 Eligibility of cenvat credit is governed by the provisions of Chapter V of the CGST Act consisting of Sections 16 to 21. While Section 16 mentions the eligibility and conditions for taking input tax credit, Section 17 speaks about apportionment of credit and blocked credit. Section 17 (5) states that notwithstanding anything contained in sub-section (1) of Section 16 and sub-section (1) of Section 18, input tax credit shall not be available in certain cases. Thus in the subject case it is imperative to find out whether the applicant is barred from taking under Section 17 (5) of the said Act. 5.4 We now reproduce the provisions of Section 17 (5) (d) of the CGST Act, which is as under: Notwithstanding anything co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sree Varalakshmi Mahaal LLP case is squarely applicable in the subject case also. 5.7. Further, the decision by the Advance Ruling Authority in West Bengal in the case of GGL HOTEL AND RESORT COMPANY LIMITED = 2019 (1) TMI 488 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL has also been cited by the jurisdictional officer but we find that the facts of that case are not at all similar to the facts of the present case. In the cited case, the party wanted to avail credit of lease paid, during pre-operative period, for the leasehold land on which the resort was being constructed to be used for furtherance of business, when the same is capitalized and treated as capital expenditure. 5.8 The applicant has placed reliance on the judgment rendered by the Hon ble High Court Orissa in the case of Safari Retreats Private Limited Vs. Chief Commissioner of Central Goods Service Tax = 2019 (5) TMI 1278 - ORISSA HIGH COURT . In the said case it is seen that the party had constructed malls which were given 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. 5.9 However, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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