Safari Retreats: Apex court's decision on GST tax credits brings relief to construction sector
The much-awaited decision of the Apex Court in the case of Safari Retreats Private Limited has finally been delivered, offering a moment of respite to the construction industry.
To outline the background briefly, the GST law under Section 17(5)(d) of the CGST Act specifically disallows tax credits on expenses incurred for the construction of immovable property (other than plant or machinery) where the construction is done for the taxpayer's own account.
Orissa High Court's Interpretation
The Orissa High Court, while dealing with the case of a builder constructing a shopping mall and leasing it out, allowed the tax credit on goods and services, based on the argument that no restriction could be imposed where an assessee is required to pay GST on rental income, even if the shopping mall qualifies as immovable property.
