Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017 govern the issues for Blocked Credit on
Construction of Immovable Property.
1. What are the provisions of Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017?
As per Sub Section 5 of Section 17 of CGST Act, 2017, 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
thanplant and machinery) except where it is an input service for further supply of works
contractservice;
(d) goods or services or both received by a taxable person for construction of an immovable
property (other than plant or machinery) on his own account including when such goods or
services orboth are used in the course or furtherance of business.
Explanation.—For the purposes of clauses (c) and (d), the expression "construction" includes
reconstruction, renovation, additions or alterations or repairs, to the extent of capitalization, to
thesaid immovable property;
2. What is the view of courts/AAR on Blocked Credit on Construction of Immovable Property?
We can at the view of the court on Blocked Credit on Construction of Immovable Property
specified in Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017 by way of following cases:-
S.
No
.
Case Name In Favor
of
Question /Fact Decision Court Matter
Pending
or
Decided
1 Safari
Retreats (P.)
Ltd. v. Chief
Commissione
r of Central
Goods &
Service Tax
assesse
e
Where petitioner
had not sold shops
in mall but had let
out same,
petitioner was
liable to pay huge
amount of GST on
rent received shall
be entitled to take
and utilize input
credit tax charged
on purchases
made in
construction.
If the assessee
is required to
pay GST on the
rental income
arising out of the
investment on
which he has
paid GST, it is
required to have
the input credit
on the GST,
which is
required to pay
under section
17(5)(d).
HIGH
COURT
OF
ORISSA
Decided
at High
Court but
SLP filed
before
Supreme
Court
(Which is
Pending)
2 Hinganghat
Integrated
Textile Park
Private
Limited. v.
Matter
Pending
The challenge in
the petition is to the
provision of
Section 17(5)(c)
and 17(5)(d) of the
Court has read
down the
provision
instead of
writing it down
Writ
Petition
in
BOMBA
Y HIGH
Pending
For GST Related Queries-Contact CA RajenderArora +91-9891112120, carajenderarora@gmail.com
Union of
India and ors.
Central Goods
and Services
Act 2017, on the
ground of double
taxation and being
discrimination. It is
the violation
of Article 14 of the
Constitution of
India for the reason
that though
petitioner-
Company is
similarly situated
with the other
establishments, the
credit of the input
goods and services
utilized for
construction of
malls to let it out on
annual rent, is
denied.
and the
petitioner
therein is held
entitled for credit
of goods and
services, input
of goods and
services in the
process of
construction of
letting out of the
malls.
Notice to the
Attorney
General of India,
returnable on
16.12.2019.
Issue Notice to
the
respondents,
returnable on
16.12.2019.
COURT
3 Kamal
Cogent
Energy
Private
Limited. v.
Union of
India
Matter
Pending
Vires of Section
17(5)(c) and
17(5)(d) of the
Central Goods and
Services Act 2017
– double taxation –
discrimination
The
respondents
seek time to file
reply. List again
on 04.05.2020.
Civil Writ
Petition
in
Rajastha
n High
Court
Pending
4 DLF Cyber
City
Developers
Limited. v.
Union of
India and ors.
Matter
Pending
Input tax credit –
Scope of Section
17(5)(d) –
construction of
immovable
property(shopping
malls)intending for
letting out for rent –
Reliance upon the
decision of
ORISSA HIGH
COURT in case of
Safari Retreats (P.)
Ltd.
It is made clear
that in case the
petition is
allowed, the
petitioner would
be entitled to
claim the credit
even if the time
limit for the
same has
lapsed.
Notice issued.
PUNJAB
AND
HARYAN
A HIGH
COURT
Pending
5 Rosewood
Hospitality
Private
Limited. v.
Union of
India
Matter
Pending
--- --- HIGH
COURT,
OF
UTTARA
KHAND
Pending
6 Delhi
International
Airport Ltd. v.
Union of
India and ors.
Matter
Pending
Present writ
petition has been
filed challenging
the constitutional
validity and legality
of Section 17(5)(c)
Notice Issued Writ
Petition
in Delhi
High
Court
Pending
For GST Related Queries-Contact CA RajenderArora +91-9891112120, carajenderarora@gmail.com
and Section
17(5)(d) of the
CGST Act, 2017
and the DGST Act,
2017 and the
Circular No. 28
dated 01st
January, 2018.
7 Bamboo
Hotel And
Global
Centre
(Delhi) Pvt
Ltd. v. Union
of India and
ors.
Matter
Pending
Same Issue Notice Issued Delhi
High
Court
Pending
For 15-9-
20
8 Riveria
Commercial
Developers
Limited. v.
Union of
India
Matter
Pending
Same Issue Notice Issued Delhi
High
Court
Pending
For 15-9-
20
9 Sree
Varalakshmi
Mahaal LLP
In Favor
of
Revenue
Whether the Input
Tax Credit against
purchases of
materials
construction of
building materials
can be claimed and
utilize to nullify the
cascading effect of
taxation?
No Input Tax
Credit is
available
against any
goods or
services
received by the
applicant for
construction of
the Marriage
Hall on his own
account even if
used in course
or furtherance of
his business of
renting the
place.
TAMILN
ADU
ADVANC
E
RULING
AUTHO
RITY
AAR
