Writ admitted for examining validity of provisions restricting ITC on construction of building for letting out on rent

Last updated: 27 October 2020

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The Karnataka High Court has admitted a writ petition challenging the validity of provisions in the CGST Act that restrict Input Tax Credit (ITC) for the construction of buildings intended for rental income, especially when GST is already paid on the rent. The court has stayed a demand of Rs. 62 crore against the petitioner, Bagmane Developers, and will examine whether Section 17(5)(c) and (d) of the CGST Act are constitutional. The court will also consider if ITC is a concession or an accrued right, and if time limits for claiming it are permissible.

Court :
Karnataka High Court

Brief :
The Hon'ble HC, Karnataka in Bagmane Developers v. Union of India [W.P. No. 9430/2020 dated October 22, 2020] stayed demand of Rs. 62 crore in a writ petition challenging credit restriction under Section 17(5)(c) and (d) of Central Goods and Services Tax Act, 2017 ("CGST Act") on construction of building used for letting out wherein GST is paid on rent.

Citation :
W.P. No. 9430/2020 dated October 22, 2020

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3499

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4999

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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