In re Premlata Rakesh Jain (Trade Name:- Sambhav Warehousing) (GST AAR Gujarat)
The Authority for Advance Ruling, Gujarat examined whether Input Tax Credit (ITC) is admissible on goods and services used for construction of a warehouse or shed from which storage and warehousing services are provided or which is leased out. The applicant, a GST-registered provider of storage and warehousing services, proposed to construct a warehouse and sought ITC on construction materials such as cement, steel, beams and columns, as well as construction services. The applicant acknowledged that such ITC was blocked under Section 17(5) of the CGST Act, 2017, but relied on the Supreme Court judgment in Safari Retreats to argue that a warehouse should be treated as “plant” based on functional use, thereby allowing ITC.
The Authority examined Section 17(5)(c) and (d) of the CGST Act and the definition of “plant and machinery” provided in the explanation to Section 17. It analysed the Supreme Court’s interpretation in Safari Retreats, noting that while the Court distinguished between “plant and machinery” in clause (c) and “plant or machinery” in clause (d), it had applied a functionality test only for clause (d). However, the Authority observed that subsequent to the Safari Retreats judgment, the legislature amended Section 17(5)(d) through Section 124 of the Finance Act, 2025. The amendment substituted the words “plant or machinery” with “plant and machinery” retrospectively from 1 July 2017 and added an explanation clarifying that any reference to “plant or machinery” shall be deemed to mean “plant and machinery”, notwithstanding any court judgment.
