TaxTMI 
TaxTMI 
What is the present legal position regarding the judgment in Safari Retreats Pvt. Ltd. v. Chief Commissioner of CGST - 2024 (10) TMI 286 - Supreme Court? Specifically, whether taxpayers are still eligible to avail Input Tax Credit (ITC) on construction of immovable property used for renting or leasing services in view of the retrospective amendment to Section 17(5)(d) of the Central Goods and Services Tax Act, 2017 substituting the expression 'plant or machinery' with 'plant and machinery', which may have the effect of nullifying the Supreme Court's ruling
Safari Retreats Pvt. Ltd. v. Chief Commissioner of CGST
06 Mar 2026 
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Input Tax Credit eligibility curtailed by retrospective 'plant and machinery' amendment, limiting ITC for construction of buildings.
The Supreme Court in Safari Retreats applied a functional test to allow ITC where a building functions as plant or machinery, but a retrospective substitution of "plant or machinery" with the defined composite term plant and machinery, which excludes buildings and civil structures, removes that interpretative basis. Consequently, capitalised costs for construction of buildings used for renting or leasing are now outside the exception and ITC remains blocked under the amended statutory framework, exposing taxpayers who relied on the judgment to departmental scrutiny. (AI Summary)
The Supreme Court in Safari Retreats applied a functional test to allow ITC where a building functions as plant or machinery, but a retrospective substitution of "plant or machinery" with the defined composite term plant and machinery, which excludes buildings and civil structures, removes that interpretative basis. Consequently, capitalised costs for construction of buildings used for renting or leasing are now outside the exception and ITC remains blocked under the amended statutory framework, exposing taxpayers who relied on the judgment to departmental scrutiny. (AI Summary)