Input Tax Credit (ITC) and the Concept of "Plant" under GST: Supreme Court

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..... ndia has provided crucial guidance on the interpretation of the term "plant" in the context of input tax credit (ITC) under the Goods and Services Tax (GST) regime. The case revolves around the eligibility of ITC for the construction of immovable properties, such as malls, warehouses, and buildings other than hotels or cinema theatres. The court's decision sheds light on the applicat .....

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..... e classified as a "plant" within the meaning of Section 17(5)(d), thereby qualifying for ITC. * The constitutional validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act, alleging violation of Articles 14, 19(1)(g), and 300A of the Constitution. Discussions and Findings of the Court Interpretation of "Plant or Machinery" The Supreme Court held t .....

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..... unctionality test must be applied on a case-by-case basis, considering the business of the registered person and the role the building plays in that business. Constitutional Validity Regarding the constitutional validity challenge, the court upheld the validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act. The court relied on the principles of reasonable classificati .....

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..... scretion in matters of taxation and economic legislation. However, the court acknowledged the potential anomalies pointed out by the assessees and strongly urged the GST Council to reconsider the formula and take a policy decision regarding the same. In light of its findings, the Supreme Court set aside the impugned judgment of the High Court of Orissa and remanded the writ petitions for a limite .....

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..... l to reconsider the formula and take a policy decision. The judgment preserves legal terminology and significant phrases from the original text, ensuring clarity and adherence to the legal principles established. The court's reliance on precedents and its detailed analysis of the issues involved provide valuable guidance for future cases involving similar questions. Overall, this landmark ju .....

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