whether ITC available for purchased commercial or residential immovable property for the business of renting of immovable property
Replies (7)
Quick Summary
This discussion explores the availability of Input Tax Credit (ITC) on the purchase of commercial or residential immovable property when used for the business of renting. While generally no ITC is available for property purchased before obtaining a completion certificate, the Orissa High Court's ruling in Safari Retreats Private Limited offers a potential favourable view. The judgement suggests ITC might be allowed if the GST chain isn't broken and the expense is for furthering business, not personal use. However, until a final apex court decision, it's advisable to refrain from claiming such ITC.
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Posted on 06 February 2020
There is no GST on purchase of immovable property after obtaining completion certificate.
Since your query is based on the orissa high court judgement, there is a possibility that the apex court would consider the issue favourably. what merits in the judgement is when the GST chain is not broken, and it is not expended on own account ( but for furtherance of business thereby generating a taxable income) . Plain reading of the section prevents the admissability but the logic behind the inadmissability seems to be unfair. the decision of Apex court is vital, but till than it is wise not to take such ITC. Thanks, With Regards