MADURAI: The Supreme Court has delivered a landmark judgment in GST history removing the injustice caused to the trade and industry, which construct commercial buildings, including malls for leasing or renting out by upholding the eligibility to avail Input Tax Credits (ITC), considering the same as ‘plant’ under ‘plant and machinery’ as per Section 17(5)(d) of the CGST Act.
S Rethinavelu, president, Agro Food Chamber of Commerce and Industry (AFCCI), Madurai on Saturday welcomed this judgment as it has fulfilled the Chamber’s demand.
The verdict would certainly help the construction industry prosper. The construction cost of buildings and infrastructure, which are functional and essential for trade and industry, would come down and consequently, the exorbitant rent for commercial buildings would see a downward trend.
The basic concept of GST is Input Tax Credit (ITC) to avoid cascading effects on the price of goods and services, which has been denied for commercial buildings without any reasoning and justification, he said.
Earlier, the AFCCI repeatedly placed demands to consider commercial buildings as ‘plant’ and give ITC benefits, but it did not yield any positive result from the GST council.
The Finance Ministry failed to note that by constructing commercial buildings, GST is paid for the goods manufactured and services provided from those buildings and the denial of ITC was a great injustice, which the Supreme Court has corrected now, by giving a big relief to all concerned.