In re Tvl. Super Chips (GST AAR Tamilnadu)
In GST AAR Tamil Nadu, the Authority examined whether input tax credit (ITC) is available on goods and services used to construct a commercial building intended to be rented out, where GST is paid on the rental income. The applicant, engaged in trading snacks and leasing commercial properties, argued that construction for leasing is not “on own account” and relied on the Supreme Court’s functionality test in Safari Retreats. The Authority held that Section 17(5)(d) of the CGST/TNGST Acts blocks ITC on construction of immovable property other than “plant and machinery,” even when used in the course or furtherance of business. It noted that buildings are expressly excluded from “plant and machinery,” and that a retrospective amendment effective 1 July 2017 clarified that references to “plant or machinery” must be read as “plant and machinery,” removing scope for alternative interpretations. Consequently, ITC on construction inputs and services for a mall/commercial building meant for leasing is not admissible.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
1. Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-Section (1) of Section 100 of CGST Act 2017/ TNGST Act 2017, within 30 days from the date on. which the ruling sought to be appealed is communicated.
