TMI Blog2024 (3) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 taxpayer varies from person to person, rule/Act, cannot be changed/amended accordingly and it is mandatory for the taxpayers to adhere the restrictions prescribed in Act and Rule. No Input Tax Credit is available on Inputs to the Applicant when the Godowns constructed by him is meant for renting it out for Commercial purposes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Suswani Foundations Private Limited, No. 125 - 90 and 90/1, Sydenhams Road, Choolai, Chennai 600003 (hereinafter referred to as the Applicant ) are registered under the GST Acts with GSTIN: 33AAVFK6262D1Z6. They have preferred an application seeking Advance Ruling on the following:- Whether ITC is available on Inputs to the Assesses whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether Input Credit on the goods and services used for construction activity, is available to them. 3.2. The Applicant, on interpretation of law, submitted that- Where the inputs are consumed in the construction of an immovable property which is meant and intended to be for the provision of taxable output services, they should be allowed to avail the Input Tax Credit (ITC). Section 17(5)(d) of the CGST Act is to give benefit to tire person who has paid GST and it has to be interpreted in continuity of the transaction, since rent income is arising out of the Godowns which are constructed after paying GST on different items. Article 14 of the Constitution of India reads as under: The State shall not deny to any person equality before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the godowns which are constructed after paying GST on different items. GST Act has been introduced with the object of avoiding the cascading effect of various indirect taxes, therefore, the denial of ITC on goods and services used for further supply of services on which GST is payable may not be correct as there is no break in the tax chain. As they are paying GST on rental income which is arising out of investment on which GST has been paid and since there is no break in the chain of business from point of procurement of material and services for construction till renting of immovable property, ITC on immovable property used for renting should be allowed. 4.1. The Centre jurisdictional Authority vide letter dated 07.08.2023, has submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction, no GST would at all be payable and therefore, no set-off of ITC would be required or warranted. Hence, the ITC paid on the goods/services received for construction of an immovable property on one s own account for furtherance of business is unavailable in terms of Section 17(5)(d) of the CGST Act, 2017. As per available records, no pending proceeding or decided on the issue raised in the AR application. 4.2. The State jurisdictional Officer, did not submit any remarks and hence it is presumed that there are no proceedings pending or decided on the issue raised in the application by the Applicant. PERSONAL HEARING 5. The Applicant, after consent, was given an opportunity to be heard in person on 01.12.2023. Smt. Anuradha Jayaraman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plant and 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 reconstruction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property. 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 godown for which he has received various goods such as cement, ste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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