Supreme Court to Decide on GST Implications of Immovable Property

Last updated: 23 August 2023

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Quick Summary

The Supreme Court of India is hearing a significant case regarding the Goods and Services Tax (GST) implications for immovable property, specifically concerning rental services. The central argument revolves around whether input tax credits used for constructing immovable property, like malls, can be claimed for rental income, especially when the law's definition of 'own account' use is unclear. The court is considering established legal precedents and the fundamental principles of the GST framework.

Court :
Supreme Court of India

Brief :
The Supreme Court of India heard the case Chief Commissioner of Central Goods And Service Tax & Ors. v. M/s. Safari Retreats Private Limited & Ors. [Civil Appeal No. 2948/202] on August 17, 2023.

Citation :
Civil Appeal No. 2948/202

The Supreme Court of India heard the case Chief Commissioner of Central Goods And Service Tax & Ors. v. M/s. Safari Retreats Private Limited & Ors. [Civil Appeal No. 2948/202] on August 17, 2023.

The ASG argued that the law denies credit when goods/services are used "on own account," a term that is not clearly defined. He also argued that immovable property (e.g., malls) is not subject to GST, and using credits from stages before property construction for rental services contradicts the GST framework. The ASG also cited the VKC Footsteps case and argued that credits cannot be granted solely based on economic rationale. He asserted that even in the pre-GST era, such credit claims were not allowed, and there's no vested right to claim them.

The matter has been listed for further hearing on August 23, 2023.

The order copy can be accessed at: Click Here

FAQ :

The Supreme Court is examining the GST implications of immovable property, particularly concerning the eligibility of input tax credits used during construction for rental services.

The case involves the Chief Commissioner of Central Goods And Service Tax & Ors. versus M/s. Safari Retreats Private Limited & Ors.

The government argues that input tax credit is denied when goods or services are used 'on own account,' a term that lacks a clear definition, and that such credits cannot be claimed solely based on economic rationale.

The government's argument suggests that immovable property itself is not subject to GST, and using credits from pre-construction stages for rental services may contradict the GST framework.

The case was heard on August 17, 2023, and is scheduled for further hearing on August 23, 2023.