Court :
Tripura High Court
Brief :
The Hon'ble Tripura High Court in M/s. SR Constructions v. The Union of India and Ors.[W.P.(C) No. 399 of 2022 dated April 4, 2023]held that the assessee is entitled to take Input Tax Credit ("ITC") on taxable works contract services availed for the supply of construction ofan immovable property.
Citation :
W.P.(C) No. 399 of 2022 dated April 4, 2023
The Hon’ble Tripura High Court in M/s. SR Constructions v. The Union of India and Ors.[W.P.(C) No. 399 of 2022 dated April 4, 2023]held that the assessee is entitled to take Input Tax Credit ("ITC") on taxable works contract services availed for the supply of construction ofan immovable property.
M/s. SR Constructions ("the Petitioner") is a construction company, entered into a contract with M/s Hotel Polo Pvt. Ltd. to construct a hotel. For providing output service of works contract services, the Petitioner received inward supply of various goods and services and paid GST on the same.
The Revenue Department issued a Show Cause Notice dated September 30, 2019 ("the SCN") demanding ITC under Section 74(1) of the Central Goods and Service Tax Act, 2017 ("the CGST Act") on the grounds that the Petitioner has availed ITC in violation of Section 17(5)(c) of the CGST Act.
The Petitioner filed reply to the SCN however, the adjudicating authority passed the orderupholding the demand vide an Order dated October 13, 2020 ("the Order in Original").
Aggrieved by the Order in Original passed by the adjudicating authority the Petitioner filed an appeal before the Appellate authority, whereby the Appellate authority vide Order in Appeal No.07/GHY (A)/Addl. Commr/CGST-AGT/2022 dated February 1, 2022 ("the Impugned Order") confirmed the demand raised by the Adjudicating authority.
Aggrieved by the Impugned Order the Petitioner filed a writ before the Hon’ble Tripura High Court.
Whether the Petitioner is entitled to avail ITC on the goods and services utilized for providing construction services to hotel building?
The Hon’ble Tripura High Court in WP (C) 399 OF 2022 held as under:
"(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:
…………………………
(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service."
LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)
LIVE Course on Foreign Exchange Management Act (FEMA)(without recording)