- The Tamil Nadu AAR ruled that Input Tax Credit (ITC) is not admissible on goods and services used for constructing a mall intended for leasing.
- The ruling is based on Section 17(5)(d) of the CGST Act, which blocks ITC for construction of immovable property (other than plant and machinery) on one’s own account, even if used for business.
- The definition of “plant and machinery” excludes buildings, so a mall does not qualify.
- The AAR interpreted “own account” to include properties constructed for leasing, despite arguments and Supreme Court observations suggesting otherwise.
- The issue remains contentious and is likely to be litigated further, as the interpretation of “own account” is still arguable.
Source: elplaw.in
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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