Input Tax Credit (ITC) and the Concept of "Plant" under GST: Supreme Court

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..... ded crucial guidance on the interpretation of the term plant in the context of input tax credit (ITC) under the Goods and Services Tax (GST) regime. The case revolves around the eligibility of ITC for the construction of immovable properties, such as malls, warehouses, and buildings other than hotels or cinema theatres. The court's decision sheds light on the application of the functionality t .....

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..... y qualifying for ITC. The constitutional validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act , alleging violation of Articles 14 , 19(1)(g) , and 300A of the Constitution . Discussions and Findings of the Court Interpretation of Plant or Machinery The Supreme Court held that the expression plant or machinery used in Section 17(5)(d) cannot be given the same meaning a .....

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..... onal Validity Regarding the constitutional validity challenge, the court upheld the validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act. The court relied on the principles of reasonable classification and the wide latitude given to the legislature in matters of taxation and economic legislation. The court found that the classification made by the provisions was based .....

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..... nsider the formula and take a policy decision regarding the same. In light of its findings, the Supreme Court set aside the impugned judgment of the High Court of Orissa and remanded the writ petitions for a limited purpose: to decide whether, in the facts of the case, the shopping mall qualifies as a plant u/s 17(5)(d) by applying the functionality test. Comprehensive Summary The Supreme Court .....

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..... The court's reliance on precedents and its detailed analysis of the issues involved provide valuable guidance for future cases involving similar questions. Overall, this landmark judgment by the Supreme Court brings much-needed clarity to the interpretation of plant and the eligibility of ITC for immovable properties under the GST regime, while also recognizing the legislature's discretion .....

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