ITC for Marriage Hall and Mall

[Muthukumar Muthunarasimhan]

Dear Experts,

My client has spent GST on various building materials and interior decorative items for marriage hall as well as Mall. As per the recent verdict of various HC about ITC available for renting of immovable properties against to offset the output GST. Can you give me those verdicts and case laws ? Can writ petition may file quoting those verdicts? or file an application under Advance ruling is best option. Please advice me.

[Ganeshan Kalyani]

2019 (5) TMI 1278 - ORISSA HIGH COURT M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & OTHERS

[KASTURI SETHI]

There is every likelihood that the department may challenge the judgment of Orissa High Court in the Supreme Court. If you opt for filing an application with Advance Ruling Authority on this issue and AAR decides the issue in your favour, the possibility of challenging the decision by the department cannot be ruled out. You have the following options :-

1. Pay tax under protest till the matter is sub judice and thus be safe and tension free.

2. No use of opting for Advance Ruling application. Wait for the decision of the department. It will be clear soon.

3. It is advised that we should follow the Act rather than the judgment. What will be the fate of this judgement in the Supreme Court, nothing can be said at this stage.

I am of the view that there is not even remote possibility of accepting this judgement by the department

[Muthukumar Muthunarasimhan]

Dear Mr. Ganeshan and Mr.Sethi Sirs,

I first of all recorded my thanks for your immediate reply. I accepted your views. But, the ITC has to be claimed atleast before filing of the Annual Return and the last day is 31st August . My question is after filing annual return, there is no possibility of claiming the accumulated ITC because of hit by the limitation of time. Hence, in this situation it is better to claim ITC and not utilised till such a clarifications that may be given by the Advance Ruling Authority. Is my opinion is correct?

[KASTURI SETHI]

Dear Sh. Muthukumar Muthunarasimhan Ji,

Yes, your opinion is correct especially, in view of the amendment in Section 50 of CGST Act to the effect that interest will be charged on net cash liability except in the case of SCN issued under Section 73 & 74 of CGST Act. Opt for filing application with Advance Ruling Authority.

[Muthukumar Muthunarasimhan]

Dear Kasturi Sethi ji,

Thanks for your active participation and immediate suitable advice. May God will shower his choicest blessings on you.

[Himansu Sekhar]

The marriage hall is not meant for perpetual renting. The building is yours and constructed for yourself. Before it was rented, you constructed the immovable property and it lost the characteristics of goods or services. Further in some parts of the year it is not rented and not used for business purposes. It fits into the definition of exempted services. Please compare these aspects with the case of safari retreats.

[Himansu Sekhar]

Please go through the Hon'ble High Court decision carefully.

[Himansu Sekhar]

Also the time period for taking itc for the year 17-18 is over.

[KASTURI SETHI]

Dear Sh. Muthukumar Muthunarasimhan Ji,

Your words are moral booster for me.

Thanks & regards.

AI Summary

Input tax credit eligibility for owner-occupied versus rented immovable property; claim before annual return or seek advance ruling. Eligibility to claim ITC for building materials and interiors used in a marriage hall or mall is contested; options include seeking an Advance Ruling, filing a writ, or claiming the credit and paying under protest to preserve rights before the annual-return deadline. Factual characterisation-owner-occupied use, intermittent renting, or exempt supply-affects entitlement, and amendments to Section 50 on interest on net cash liability influence whether to claim ITC now or await authoritative clarity.