Quick Summary
Developers receive notices for ITC claims Several real estate developers have received show-cause notices from the Goods and Services Tax (GST) authorities regarding input tax credit (ITC) claims worth an estimated ₹3,500 crore. The notices follow the Supreme Court's October ruling in theSafari Retreats case, which allowed commercial realty companies to claim ITC on construction costs for rental buildings. Refunds and blocked credits GST officials have sought refunds of ITC claimed by devel
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FAQ :
Developers are receiving GST notices regarding input tax credit (ITC) claims worth an estimated £3,500 crore, following a Supreme Court ruling in the Safari Retreats case.
The Supreme Court upheld the constitutional validity of ITC provisions but stated that eligibility must be determined by whether the property qualifies as 'plant or machinery' and if it's leased or sold before construction completion.
Developers are experiencing significant confusion, with some ITC claims being blocked entirely and tax officials seeking refunds, alleging the credits were wrongly availed.
Many developers have initiated legal challenges against the notices, arguing that tax officials are misinterpreting the Supreme Court's ruling and denying legitimate claims.
Experts are calling for a clear, scientific, and objective mechanism to determine ITC eligibility uniformly across the industry, to prevent arbitrary denial of claims and potential misuse.
The uncertainty over ITC claims and blocked credits could disrupt cash flows and project timelines for developers, impacting the wider real estate industry.
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