Leased Property GST ITC: Legal dispute, policy changes deepen tax uncertainty
The Supreme Court ruling allowing ITC on leased properties faces uncertainty with a retrospective amendment proposed in the Finance Bill 2005 and a pending review petition by the revenue department. Experts advise detailed legal assessments of ITC positions amidst ongoing uncertainty, urging companies to prepare for potential litigation and reassessment of tax liabilities.
The eligibility of input tax credit (ITC) on construction expenses for leased properties has become a challenging issue, with both judicial and legislative developments creating uncertainty for real estate developers and commercial property investors.
While the Supreme Court’s October 2024 ruling in the Safari Retreats case provided relief by allowing ITC on leased properties, recent government actions including a retrospective amendment proposed in the Finance Bill 2005 may lead to concerns over tax predictability and compliance burdens.
