Keep your fingers Crossed for historical judgment of Safari Retreats

The arguments for this case are completed and the court has reserved the order. This will be a historical judgment. ITC is a very important part of GST. In its judgment, Orissa High Court allowed the ITC of Construction of Immovable property which is further used for making supplies. It was a breather for the taxpayers. But around 4 years later the ball is with the Supreme Court and we all are here waiting for the result.

There is a possibility of getting an adverse result. That will be sad for business as the government is trying to make India a manufacturing hub but on the other hand not allowing the ITC of major capital expenditure will hit the industrial growth of the country.

There can be arguments for the viability of the claim of ITC but there is no doubt about the importance of this ITC for businesses.

In GST the ITC of all inputs and capital goods is allowed but in the case of construction of immovable property, the ITC is not allowed. The logic behind that is the chain of taxability breaks here as the Sale of immovable property is not under the taxability in GST. Assuming that the property will be sold without tax the blockage is fine. But there are other scenarios also.

In case the property is used for a factory or office or a manufacturing unit the chain of taxability is not breaking and the ITC should be available. The whole country is waiting for this judgment.