2024 (3) TMI 673 - AAR - GST

Input Tax Credit - availability of inputs to the Assesses when the Godowns constructed by him is entirely meant for renting it out for Commercial purposes to registered dealers - HELD THAT - The Applicant is proposing to rent out to large companies for storing their stock for future sale i.e. for furtherance of his business. Therefore, as per section 17(5) (d), no ITC is available on any goods or services received by them for such construction and the same cannot be claimed by them. The Legislative Scheme is amply clear. The input tax paid on the goods/services received for construction of an immovable property on one s own account is unavailable. The restriction is provided in the Act which is passed by the Legislature. The power to restrict flow of credit exists under Section 16(1) of the GST Act, which shows a Legislative intent that Input Tax credit may not always be allowed partially or fully. As the suitability and requirement of taxpayer varies from person to person, rule/Act, cannot be changed/amended accordingly and it is mandatory for the taxpayers to adhere the restrictions prescribed in Act and Rule. No Input Tax Credit is available on Inputs to the Applicant when the Godowns constructed by him is meant for renting it out for Commercial purposes to registered dealers.

Summary

Issues Involved:
The judgment involves issues related to the availability of Input Tax Credit (ITC) on inputs used for constructing godowns meant for commercial renting.

Summary:
The Authority for Advance Ruling, Tamil Nadu considered an application by a company seeking clarity on whether ITC is available on inputs used for constructing godowns intended for commercial renting to registered dealers. The company contended that since the godowns were constructed for business purposes, ITC should be allowed. However, the jurisdictional authorities cited Section 17(5)(d) of the CGST Act, which blocks ITC for goods or services used in constructing immovable property for one's own account. The company argued based on Article 14 of the Constitution of India, but the Authority held that the legislative scheme clearly restricts ITC in such cases, as per Section 17(5)(d). The ruling stated that no ITC is available on inputs for constructing godowns meant for commercial renting.

Key Findings:
- The company applied for an Advance Ruling on the availability of ITC for inputs used in constructing godowns for commercial renting.
- Section 17(5)(d) of the CGST Act blocks ITC for goods or services used in constructing immovable property for one's own account.
- The company's argument based on Article 14 of the Constitution was not accepted by the Authority.
- The ruling concluded that no ITC is available on inputs for constructing godowns meant for commercial renting to registered dealers.