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December 2024

Analysis of the Decision of the Supreme Court in Safari Retreats

By Nikitha Vaitheeswaran, Advocate
Reading Time 18 mins

BACKGROUND

The Odisha High Court, in the case of Safari Retreats Private Limited vs. CCCGST1 applied the Apex Court decision in Eicher Motors Ltd vs. UoI2 and held that Section 17(5)(d) was to be read down and purported that the very purpose of ITC was to benefit the assessee. It was held that the narrow interpretation given by the Department to Section 17(5)(d) would frustrate the very object of the Act. The petitioners before the Odisha High Court had claimed ITC for setting it off against rental income arising out of letting out a shopping mall. The Supreme Court, on appeal by the Revenue, pronounced its landmark verdict in the case of CCCGST vs. Safari Retreats Private Limited3.

ANALYSIS OF RELEVANT SECTIONS OF THE CGST ACT, 2017

GST is to be levied on supplies of goods or services or both4.There exist certain categories where the tax on the supply of goods or services or both shall be paid on a reverse charge basis by the recipient5. Only a registered person can avail ITC6. Availability of ITC is subject to certain conditions and restrictions as prescribed by the Act or its Rules. Se

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