Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Input Tax Credit Restrictions Under GST Section 17(5)(d) Challenged as Unconstitutional for Construction Services The HC considered a constitutional challenge to Section-17(5)(d) of the Central Goods and Services Tax Act, 2017, which restricts input tax credit for ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Input Tax Credit Restrictions Under GST Section 17(5)(d) Challenged as Unconstitutional for Construction Services
The HC considered a constitutional challenge to Section-17(5)(d) of the Central Goods and Services Tax Act, 2017, which restricts input tax credit for goods/services used in construction of immovable property. Petitioner argued the provision violates Articles 14, 19(1)(g), 300A, and 265. The court referenced the Orissa HC decision in Safari Retreats Private Limited, which read down but did not invalidate the provision. The court issued notices to respondents and the Attorney General, directing the matter to be heard alongside a similar pending petition (R.R. Kable Limited case).
Issues Involved: Challenge to the constitutional validity of Section-17(5)(d) of the Central Goods and Services Tax Act, 2017.
Analysis:
1. The petitioner sought to challenge the constitutional validity of Section-17(5)(d) of the Central Goods and Services Tax Act, 2017, arguing that it is ultravires the Articles 14, 19(1)(g), 300A, and 265 of the Constitution of India. The provision in question restricts input tax credit for goods or services used in the construction of an immovable property on one's own account. The explanation provided under the section clarifies that "construction" includes various activities related to immovable property capitalization.
2. Reference was made to a similar case before the High Court of Orissa where Section-17(5)(d) was challenged. The Orissa High Court, in the case of M/s. Safari Retreats Private Limited, declined to declare the provision ultravires but opted to read it down. The court emphasized that the purpose of input tax credit is to benefit the assessee and highlighted the importance of allowing credit on GST paid on rental income from investments subjected to GST.
3. Another related petition is pending before the Gujarat High Court in the case of R.R. Kable Limited Vs. Union of India. The court issued notices to the respondents, returnable on a specified date, and also to the Attorney General of India. The matter is scheduled to be heard along with the pending petition. Additionally, the court directed the petitioner to furnish a set of the entire paper-book to the Assistant Solicitor General of India, Mr. Devang Vyas, for reference.
This detailed analysis covers the challenge to the constitutional validity of Section-17(5)(d) of the Central Goods and Services Tax Act, 2017, along with references to relevant precedents and ongoing related cases before the High Court of Gujarat.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
of 
TaxTMI 
