The top court had, in October, allowed input tax credit (ITC) claims on construction costs for rental properties.
The SC judgment, according to experts, could have an adverse impact on the exchequer, to the tune of at least ₹10,000 crore, as the ruling was effective retroactively from July 1, 2017. The SC concluded that the terms "plant and machinery", and "plant or machinery", used in the CGST Act are distinct and set forth guiding principles for defining "plant." The court ruled that input tax credit eligibility must be assessed on a case-by-case basis, considering factors such as the taxpayer's business nature and the operational role of the building.
The SC judgment on the expression "plant or machinery" appears to defeat the intention of the GST Council, the law committee observed.
The case relates to eligibility of input tax credit for commercial properties meant for renting or leasing.
This story is from the December 19, 2024 edition of Business Standard.
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This story is from the December 19, 2024 edition of Business Standard.
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