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November 2024

Goods And Services Tax

By Puloma Dalal | Jayesh Gogri | Mandar Telang, Chartered Accountants
Reading Time 13 mins

I SUPREME COURT

59. Chief Commissioner of Central Goods and Service Tax vs. Safari Retreats (P.) Ltd.

[2024] 167 taxmann.com 73 (SC)

Dated: 3rd October, 2024

The term “plant or machinery” in section 17(5)(d) is distinct from “plant and machinery” in section 17(5)(c) and explanation, and hence, in absence of statutory definition, the word “plant” will be interpreted in its ordinary meaning in commercial terms. Consequently, whether a building qualifies as a plant depends on its role in the business and the “functionality test”. The Court upheld the constitutional validity of sections 17(5)(c), 17(5)(d), and 16(4) of the CGST Act.

FACTS

In this case, the issue before the Court was whether restrictions on ITC contained in section 17(5)(d) are applicable to the construction of immovable property intended for letting out on rent and whether provisions of sections 17(5)(c) and 17(5)(d) are violative of Articles 14 and 19(1)(g) of the Constitution of India. There was also challenge made to provisions of section 16(4) of the CGST Act.

HELD

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