TaxTMI 
TaxTMI 
ITC AVAILABLE ON LIFT INSTALLED IN COMMERCIAL BUILDING GIVEN FOR RENT
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....TC AVAILABLE ON LIFT INSTALLED IN COMMERCIAL BUILDING GIVEN FOR RENT<br> Query (Issue) Started By: - S.C. WADHWA Dated:- 3-9-2024 Last Reply Date:- 17-12-2024 Goods and Services Tax - GST<br>Got 120 Replies<br>GST<br>Dear Expert, We have purchased one lift leving gst and installed in building given on rent for commercial purpose. My query is whether GST paid on Lift in Dec.23 will be available till 30th Sept.24 as we have not show this in any gst return till now. Please give your expert opinion. REGARDS, WADHWA Reply By Shilpi Jain: The Reply: 2 issues here. 1st whether credit of lift is available or not. 2nd time by when this can be availed. You can avail credit up to 30th Nov '24 in any of the GSTR-3B filed by then. 1st query - In my view credit of lift available since it is a P&M. Reply By Sadanand Bulbule: The Reply: Dear querist In my considered view, the ITC is not admissible on purchase of Lift as per the Section 17(5) (d) of the CGST Act, 2017. Reply By KASTURI SETHI: The Reply: I agree with the views of Sh. Sadanand Bulbule, Sir Ji. ITC on lift is not admissible because after assembling of the parts of lift i.e. car motor, ropes, rails, shaft, safety sys....
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....tem, breaking system etc. and installation of the 'lift' in the building, lift becomes an integral part of the building (immovable property). 'Lift' without building has no existence. 'Lift' is not covered under the definition of 'plant and machinery. Hence ITC on lift is hit by Section 17 (5) (d) of CGST Act. Explanation given below sub-section 6 of Section 17 may also be read in this context. 'Building' is clearly excluded from the expression, 'plant and machinery'. Reply By Shilpi Jain: The Reply: Lift is an equipment or machinery. If used for making outward supply, it would be eligible for credit as there is no restriction in law for credit relating to immovable P&M. P&M credit is eligible under GST even if it pertains to a P&M which is immovable . Reply By KASTURI SETHI: The Reply: (i) Components and parts of 'lift' are assembled (manufactured) at site as per the suitability of the building. Hence Lift becomes an integral part of the building (immovable property). Lift is a tailor made goods as per specific building. Lift cannot operate without building. So 'lift' s independent identity as machinery loses its exi....
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....stence after becoming an integral part of the building and building is excluded from the scope of 'Plant & Machinery' as Explanation given below sub-section 6 of Section 17 of CGST Act. (ii) ITC on 'lift' has been denied in the following decisions of AAR/AARs :- (Rationale behind denial is worth reading) (a) 2020 (7) TMI 476 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH : JABALPUR HOTELS PVT. LTD. (in favour of the department) (b) 2020 (9) TMI 1144 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA: LAS PALMAS CO-OP. HOUSING SOCIETY (in favour of the department) (c) 2022 (11) TMI 390 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA : MAHAVIR NAGAR SHIV SHRUSHTI CO-OP HOUSING SOCIETY LTD.( in favour of the department) Reply By Sadanand Bulbule: The Reply: Dear querist Please find the following supplementary points affirming my earlier reply: M/s Kone Elevators vs State of Tamil Nadu (2014 (5) TMI 265 - SUPREME COURT) 1] Lift, being integral part of building is immovable property as this is attached to building for the permanent beneficial enjoyment of the said building and therefore cannot be termed as "plant and/or machinery". 2] Further the t....
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....erm " Plant & Machinery" has different meanings under different statutes. So one need to thoughtfully underline the specified meaning given to it under the Explanation annexed to Section 17[5][d] of the CGST Act. It cannot be expanded to suit the entitlement that is expressly prohibited. 3] Go as per law or else choice is yours to enjoy roller-coaster during adjudication. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, In support of your reply at serial no.1 dated 03.09.2024 I have traced out a few judgements of Hon'ble Supreme Court in this context and the same are as under : (i) In the case of Triveni Engg. Industries Ltd. v. C.C.E. - 2000 (8) TMI 86 - SUPREME COURT, Hon'ble Supreme Court had held as under:- "that after assembling, on completion of process of erection, the item becomes a part of the building or an immovable property. (ii) In the case of Quality Steel Tubes (P) Ltd. v. C.C.E. 1994 (12) TMI 75 - SUPREME COURT Hon'ble Supreme Court had held as under : "erection and maintenance of lifts forms part of the immovable property". Reply By Pradeep Reddy: The Reply: I Agree with Shilpi Madam. The lift can be ....
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....considered as a "plant and machinery" as defined under the CGST Act, even if it forms part of a building (immovable property). Therefore, ITC is not barred by 17 (5). ITC is not barred on immovable property if qualifies as plant and machinery Reply By Amit Agrawal: The Reply: In my view, ITC against Lift will be available for following reasons: A. Here, I am assuming that subject 'Lift' is shown as separate asset in tax-payer's Balance-Sheet and same is not capitalised under the head 'Building' (which already has staircase/s) but shown as separate asset under Plant & Machinery (being 'additional facility' provided to the occupants / tenants of the building). B. What is blocked u/s sub-clauses (c) & (d) of Section 17(5) is 'Construction' of immovable property. For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property. B. Said Lift is not 'constructed' but assembled / erected at site. And there are difference in the activity of 'construction' & assembly / erection as c....
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....an be seen from definition of works contract services given under Section 2(119) of the CGST Act, 2017 which reads as follows: ""works contract" means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;" C. Once tax-payer has NOT received any services of 'construction' but received goods & services (i.e. works contract u/s 2(119) in nature of erection / installation of an immovable property), there is no question of barring ITC sub-clauses (c) & (d) of Section 17(5). Bar of ITC u/s sub-clauses (c) & (d) of Section 17(5) is only for 'Construction' and same is NOT for 'Erection / Installation'. And this view of mine has got nothing to with explanation given after Section 17(6). D. Moreover, as subject cost is NOT capitalised under the head 'Building' by the tax-payer (which already has staircase/s) but shown as separate asset under Plant & Machinery in hi....
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....s balance-sheet (being 'additional facility' provided to the occupants / tenants of the building), this is another reason NOT to deny ITC using sub-clauses (c) & (d) of Section 17(5). This view of mine is considering 'explanation given after Section 17(5)(d) read with explanation given after Section 17(6)'. In effect, tax-payer got two immovable properties (one is 'Building' & other is 'Plant & Machinery'). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Another, but much more controversial, issue here is whether 'lift' is a 'immovable property' or not for the purpose of & in context of sub-clauses (c) & (d) of Section 17(5), specially when entire purpose of such lift is its movement to transport of people / goods from one floor to another. This aspect of controversy much more study before commenting anything in favor of tax-payer. Hence, I left this part while sharing my ex-facie views in earlier post. Reply By Alkesh Jani: The Reply: Shri, In response to the query raised, I concur with the views expressed by our este....
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....emed experts, Shri Kasturiji Sir and Shri Sadanand Bulbuleji Sir. Their opinions are well-founded and supported by authoritative references. It is important to note that the construction service is considered complete upon the issuance of a No Objection Certificate (NOC) or Building Use Permission from the relevant authority. Until such approval is obtained, the activity remains classified as a construction service. Furthermore, the installation of a lift is mandatory for buildings exceeding a certain height of civil structure, and it constitutes a common property shared by all members. The lift is an integral part of the building's structure. Therefore, declaration of this expenditure under any head of Accounting will not affect the applicability of Section 17(5) of the CGST Act, 2017. Thanks, Reply By Sadanand Bulbule: The Reply: Dear querist Interpretations cannot tinker the well settled law per se. Meaning, all efforts would lead searching for a tiny needle in a haystack. So one should not try to fence the sky. Opinions do change but fact remains unchanged. Entitlement of ITC is based on facts and not on opinions. Good luck. Reply By Amit Agrawal: The Reply: W.r.t.....
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.... Para A from my earlier post above and in context of going discussion here, case-law of THE COMMISSIONER OF INCOME-TAX, BANGALORE AND THE DEPUTY COMMISSIONER OF INCOME-TAX, BANGALORE VERSUS M/S. IBC KNOWLEDGE PARK PVT. LTD. AND VICA-VERSA, (2016 (5) TMI 372 - KARNATAKA HIGH COURT) is worth noting (even though same related to income tax where Dept. was arguing that 'as elevator / lift is part of building i.e. house property, depreciation cannot be claimed' & HC ruled otherwise): "Depreciation in respect of electrical installations, elevators, DG sets installed in the building, which have been let-out by the assessee, which is receiving rental income from the said building - Held that:- The lessee is required to pay not only the rentals on the building but also charges for the facilities provided by the assessee. The facilities and services provided by the assessee are at Annexure-2 to the said agreement. On a conjoint reading, it becomes clear that the rental income is income from house property. But the charges received towards provision and maintenance of facilities and services as per Annexure-2 cannot be construed to be income from house property. The said income,....
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.... in our view, has to be considered as income from business and therefore, the claim for depreciation has to be allowed, which has been rightly done so by the Tribunal. - Decided in favour of assessee" These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Ganeshan Kalyani: The Reply: In books of accounts, the lift is generally capitalized under 'building'. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, This is with reference to your contents expressed at serial no. 12 dated 04.09.2024. Just as a fact always remains unchanged, similarly, dictionary meaning and its essence remains unchanged because English language dictionary is internationally accepted. Reply By KASTURI SETHI: The Reply: Sh.Ganeshan Kalyani Ji, Pl. refer to your view at serial no.14 above. Any legal backing in support of your view? I am looking forward to your eagerly. Reply By KASTURI SETHI: The Reply: Pl.read 'your response' instead of 'your' Reply By VENU K: The Reply: I feel a large number of judicial decisions as well as advance rulings have stressed on the fact that isomething t....
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....hat ultimately becomes an integral part of a building cannot be considered as plant and machinery. A stand alone airconditioner is treated as plant and machinery but a centralised airconditioning plant gets merged with the building and becomes an integral part of building after its installation. Same logic applies to lifts also in my opinion. As other experts have quoted many legal decisions and AAR , I do not venture into the same . After all, in an SCN, the department is just taking an alternate tax position and it has enough materials to support its tax position and confirm the demand. So to what extend first appellate authority or even tribunal will be able to give us relief is a moot question. Anyway any illuminating discussion that takes place is always an occassion for further learning and exchange of ideas. Thank you experts for your scholarly views on the subject. Reply By KASTURI SETHI: The Reply: Sh. Venu K Ji, (i) What is worth highlighting is that your thoughts are original and not influenced by any expert or any judgement of any court. I term the contents of your article as TEXT and these are in the fitness of things. Logic and reasoning are par excellence. (ii....
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....) You have chosen your words very carefully. (iii) Your article has boosted my morale. (iv) Thank you very much your contribution on the issue. Reply By Sadanand Bulbule: The Reply: Dear querist Legal battle is more preferable than legal adventure. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, Will you oblige me by decoding the version posted at serial no.20 dated 06.09.24? I could not grasp it. Thanks a lot. Reply By Shilpi Jain: The Reply: From all the above discussions u can make out that this is an interpretation issue. If credit amount is big and you are ok to take litigation on, pls proceed to take credit. If u don't do this then do not feel disheartened in case in future u see a favourable HC decision or a circular being issued clarifying that credit is available in this situation. Reply By Sadanand Bulbule: The Reply: Dear Sh Sethi sir ji I am not expert in decoding. However, law is like sky.It is not possible to see what is beyond sky.Interpretations are like "clouds" and our standpoint is the basis for formation of interpretation. They appear in different shades,sizes,images and move away.But the sky [facts] remains as it i....
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....s. So I love the sky most. Reply By Sadanand Bulbule: The Reply: Dear querist Please refer the following on precisely similar issue: 2024 (9) TMI 298 - APPELLATE AUTHORITY FOR ADVANCE RULING, TAMILNADU - IN RE: M/S. ARTHANARISAMY SENTHIL MAHARAJ Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, I have perused the decision of AAAR posted word for word. The ratio of the decision is applicable to the present issue raised by the querist. Reply By Amit Agrawal: The Reply: Relying on 'Advance authorities rulings' is to decide any legal issues under GST can be very risky for the tax-payer point of view, as most of these rulings have pro-revenue bias. I never consider these rulings for taking any position on any legal issues. I see them from limited point of view of knowing Dept's stand on any given issue and then, independently, examine issue/s on my own and then, take my call irrespective of what is stated in those rulings (& my views - generally specking - is contrary to these ARR rulings in majority cases). W.r.t. available AAA/AAAR rulings on the subject matter under discussion (which are quoted by many contributors in earlier posts here) are grossly f....
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....aulty in their reasoning & wrong application of various Apex Court rulings (which are also quoted by many contributors in earlier posts here), in my view. In those Apex Court rulings, issues under consideration were very different (manufacturing of excisable goods V/s Erection of immovable property, Sale of goods V/s Works Contract involving immovable property etc). And various remarks & findings made by Apex Court must be seen from those context only where Court refused to accept Dept's contention/s that activity of erection of lifts amounts to manufacture OR sale of goods. Basic reason behind those decisions is that 'Erection of Lift' amounts to 'Works Contract' (& NOT sale of goods per se) as 'assembled / erected lift' cannot be called as 'goods' (i.e. on principal of movability as essential future of any goods). Similarly, courts in those cases refused to accept Dept's contention that 'assembled / erected lift' can be called as 'goods' manufactured (i.e. again on principal of movability). All court has said that 'assembled / erected lift' is an immovable property (i.e. non-goods) and hence, same cannot be called as 'Sale of goods' per se or manufacturing of excisable goods. A....
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....ll these rulings of Apex court (which are also quoted by many contributors in earlier posts here) do NOT have any bearing on subject of issue under discussion here what-so-ever (i.e. availability of ITC in context of sub-clauses (c) & (d) of Section 17(5) read with explanations given thereunder). It is worth noting that no court till date has decided on the subject issue which is under discussion here and hence, there is zero judicial precedent on this legal issue under discussion here. As reported at 2021 (1) TMI 926 - KARNATAKA HIGH COURT, in case of M/S. KLUBER LUBRICATION (INDIA) PVT LTD VERSUS ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZONE-1, Para 21 is worth noting and same is as follows: "It is well settled in law that a decision of the court is only an authority for what it decides and not what can logically be deduced therefrom. It cannot be quoted for a proposition that may seem to follow logically from it and such a mode of reasoning assumes that law is necessarily a logical code, whereas it must be acknowledged that law is not always logical. It is equally well settled legal position, that court should not place reliance on a decision without discussing as to ho....
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....w the factual situation fits in with the fact situation of the decision, on which reliance is placed. [See: 'DELHI ADMINISTRATION (NCT OF DELHI) VS. MANOHAR LAL, 2002 (8) TMI 851 - SUPREME COURT and 'HARYANA FINANCIAL CORPORATION VS. JAGADAMBA OIL MILLS', 2002 (1) TMI 1266 - SUPREME COURT]. It is well settled in law that observations of the courts are neither to be read Euclid's theorems nor as provisions of a statute and should not be taken out of their context. The observations must be read in the context, in which they appear to have been stated. The Judges interpret statutes and they do not interpret judgments. [See: 'BHARAT PETROLEUM CORPORATION LTD. & ANR. VERSUS NR. VAIRAMANI & ANR 2004 (10) TMI 576 - SUPREME COURT)." I can quote many more judgements on this, which basically says what is summarized by Karnataka HC above. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By RaamSrinivasan Kalpathi: The Reply: To play safe, the querist can avail the ITC and reverse the ITC in GSTR-3B in the same month. If there is a favourable ruling later, then the querist is always free to take re-credit an....
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....d that too without any timelines. Thanks Reply By Sadanand Bulbule: The Reply: Dear querist Taxman like Shylock is always quenched for his "pound of flesh". The twist in the story is not for for a single drop of blood. So taxman has to "re-think" and taxpayer has to be shrewd like Antonio and Bassanio to ensure that it is not for a drop of blood.This needs intelligent legal advisor and then law works in its own favour. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, From your views expressed at serial nos. 20 & 23, inference can be drawn as under : "Intellect and insight both will be determinant factors". Reply By Amit Agrawal: The Reply: As per well settled legal position about how to see and read any judgement of Courts, which is explained by me in earlier post at Sr. No. 26 above, it is clear that remarks / observations made in various quoted SC rulings (about relationship between lift / elevators with building) has got no application what-so-ever on subject legal controversy under discussion here. As quoted AAR / AAPR wrongly applied remarks made in those SC rulings, quoted AAA / AAAR (favoring revenue) has got lost even....
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.... their persuasive values. Now, to take this discussion forwards, let us take at the issue with fresh eyes: A. Clause (c) & (d) of Section 17(5) specifically includes 'Plant & Machinery' (P&M) while blocking ITC. B. P&M is explained below Section 17(6) as follows: "Explanation.-- For the purposes of this Chapter and Chapter VI, the expression "plant and machinery" means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises." B1. What is excluded from P&M is 'building or any other civil structures' and NOT 'building or any civil structures'. Thus, for purpose of exclusion of ITC under clause (c) & (d) of Section 17(5), building is specifically made equivalent to 'a civil structure' & nothing beyond. Lift / Elevators are NOT be called as 'Civil Structure' under common parlance. B2. Without prejudice to above, Lift can be cal....
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....led as 'permanent fixture of building'. But calling it 'permanent fixture of building' itself means it is otherwise 'separately identifiable immovable property' from 'a civil structure of building'. And, separately identifiable immovable property (i.e. Lifts / elevators) fits perfectly into the explanation defining P&M for taking ITC even if it excludes 'buildings'. B2.1 'Fixture' is defined in Oxford Language as follows: a piece of equipment or furniture which is fixed in position in a building or vehicle B3. Thus, what is excluded from P&M is 'Civil structure of Building' and NOT P&M (i.e. Lift / Elevators' which is installed / erected in such buildings. Summarizing above, I see not any reason why ITC against such lift / elevators cannot be claimed by a tax-payer in subject situation given by the querist. Exclusion from ITC under Clause (c) & (d) of Section 17(5) does not apply in given situation in my view. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Please read Para A from my last post above as follo....
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....ws: A. Clause (c) & (d) of Section 17(5) specifically excludes 'Plant & Machinery' (P&M) while blocking ITC against immovable property. Reply By Amit Agrawal: The Reply: And for very same reasons, I am also of the view that ITC against a 'centralised air-conditioning plant' installed within a the building can also be taken when same is used for making outward supply of goods or services or both. And blockage to ITC against 'immovable property' under clause (c) & (d) of Section 17(5) does not apply to even such 'apparatus / equipment / machinery which is fixed to earth by foundation or structural support' within a building. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: And my views in earlier posts (i.e. Post at Sr. No. 30, 31 & 32 read with post at Sr. No. 26) will remain the same even if tax-payer capitalized expenses incurred against erection / installation of such lifts / elevators / centralized air-conditioning plant under the head 'Building' in his books of accounts. These are ex facie views of mine and the same should....
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.... not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Despite my views shared in Post at Sr. No. 34 above & without contradicting them in any sense, I would prefer such tax-payer to capitalize expenses incurred against erection / installation of such lifts / elevators / centralized air-conditioning plant under the head 'Plant & Machinery' in his books of accounts to the extent possible (i.e. unless and until someone can point out 'specifics' about applicable accounting standards, applicable provisions of laws like income tax act, companies act & rules made thereunder, which does not allow such capitalization under the head 'Plant & Machinery', as I do not deal in those areas professionally). This is more so, generally specking, when average working life of these 'apparatus / equipment / machinery which is fixed to earth by foundation or structural support' is less than 'Buildings' within which these are erected. If not permitted under income tax act, tax-payer need not claim depreciation against those assets while capitalizing them under the head P&M. This steps (i.e. capitalization unde....
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....r P&M) will further help tax-payer while defending itself in expected litigation against ITC so claimed. And, IF such steps (i.e. capitalization under P&M) are not permitted due to some applicable accounting standards, applicable provisions of other law/s, 'such information & reasons' itself can be used to defend ITC (in addition to grounds taken by me in earliest posts above) while simultaneously capitalizing them under the head 'Building' in tax-payer's books of accounts. Either way, I do not see any legally valid reason to deny subject ITC. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By KASTURI SETHI: The Reply: Only time will tell. Reply By KASTURI SETHI: The Reply: In continuation of my view at serial no.35, I add that what is legally correct is in the lap of time. Reply By RaamSrinivasan Kalpathi: The Reply: I specifically refer to the case Safari Retreats Private Limited - 2019 (5) TMI 1278 - ORISSA HIGH COURT, wherein the Orissa HC had allowed ITC by reading down Sec.17(5)(d) for the purpose of interpretation to give benefit to the RTP, whereby it ruled that....
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.... if ITC is denied on building meant and intended to be let out it would amount to treating the transaction identical to a building meant and intended to be sold. HC further ruled that treatment of these two different types of transactions as one for the purpose of GST, is contrary to the basic principles regarding classification of subject matter of tax levy and, therefore, violative of Article 14 of the Constitution. The Department has filed a SLP before the SC and same has been listed for hearing before a two member bench on 31-Aug-24. Let's wait for the final judgment. In the interregnum I would suggest to the querist to avail ITC in 3B and reverse the same in the same month and await the SC judgment in the case of Safari Retreats. Thanks Reply By Amit Agrawal: The Reply: Dear Shri RaamSrinivasan Kalpathi Ji, Reversal in ITC u/s 17(5) is 'permanent / absolute in nature' as per Point No. B (read with Point No. C) under Para 4.3 of Circular 170/02/2022-GST. While one can always challenge validity of such circular etc. (with risk of it being upheld in court in future), but suggested course of action by you will lead to 'another set of legal challenges from Dept....
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.....' that the tax-payer will have to face if he reverses subject ITC now u/s 17(5) and try to re-claim it in distant future after getting favorable court ruling/s in future. With due respect, on net-net basis, I do not see any gain to the tax-payer to reverse subject ITC now u/s 17(5) with hope of re-claiming it in the distant future. Actually, such course of action can lead to loose-loose situation for the tax-payer (i.e. even when court rules in favor of tax-payer in future on the subject ITC under discussion here). It is better for any tax-payer to take definitive calls now about whether to take subject ITC or not, in my humble view. Of-course, as always the case for every controversial / litigation-prone issue, it is for every tax-payer who has to take these calls 'individually / for himself' depending upon so-many different factors (such as risk-appetite, quantum involved, willingness to go through judicial process/es & costs thereof, professional calibre and past record of his consultant handing complicated cases & so on). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Raa....
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....mSrinivasan Kalpathi: The Reply: In response to the point raised by respected Shri. Amitji, I submit that this correspondent, being a CA, is not in the business of interpretation of statutes. I firmly believe that interpretation is in the realm of advocates, IRS, department officials and doctorates in law. Nonetheless, this correspondent only attempts understand law. Coming to brasstacks - there is a specific column in Form 3B table which has been introduced from August 2023. A separate module for the opening balance pertaining to this table was also provided which was open till Dec, 2023. Table no. 4(B)(2) which allows a RTP to reverse ITC and reclaim it subsequently. There is another ribbon provided below to furnish details of ITC pertaining to previous periods which have been reclaimed. Dept with the help of these 2 modules monitors what has been reclaimed never exceeds what has been reversed. A browse through the latest 3B Returns will through insight into this aspect. Thanks Reply By RaamSrinivasan Kalpathi: The Reply: More specifically what is suggested to the querist is to reverse the ITC under table 4(B)(2) and then reclaim as when there is a favourable decision and re....
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....port the same under Table 4(D)(1). Technically, department will not have a case against the querist's client. Format of Table 4 has been pasted from TMI Forms section. 4. Eligible ITC Details Integrated Tax Central Tax State/UT Tax Cess 1 2 3 4 5 (A) ITC Available (whether in full or part) (1) Import of goods (2) Import of services (3) Inward supplies liable to reverse charge (other than 1 & 2 above) (4) Inward supplies from ISD (5) All other ITC (B) ITC Reversed (1) [As per rules 38, 42 and 43 of CGST Rules and sub-section (5) of section 17] (2) Others (C) Net ITC Available (A) - (B) (D) [Other Details] (1) [ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period] (2) [Ineligible ITC under section 16(4) and ITC restricted due to PoS provisions] Reply By Amit Agrawal: The Reply: IMHO, taking ITC now and then immediately reversing it (even under table 4(B)(2)) will amount to 'not-taking ITC' - in given situation under discussion here - for the purpose of Section 16(4) read with Section 41(1) of the CGST Act, 2017. And re-claiming such ITC in distant future (i.e. as and when as when there is a favorable decision and repor....
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....t the same under Table 4(D)(1)) is fraught with legal risks as such ITC taken in future will be treated as time-barred u/s 16(4) read with Section 41(1) (as, if & when detected by Dept. through audit / scrutiny / investigation etc.) for the tax-payer, IMHO. If tax-payer is such a blind risk-taker (i.e. to take above risks), why not to take ITC now & defend such ITC (as, if & when detected by Dept. through audit / scrutiny / investigation etc. as current online system of Dept. does not know nature / classification of ITC so taken and if such ITC is wrongly taken or not). There is enough legal grounds are available to defend such ITC, if he got good professionals to defend & willingness to go through judicial process & cost thereof etc., IMHO. And risk of loosing substantially against re-claimed ITC (to be taken in future if favorable court decision comes out) is much much greater as explained above Para/s than taking ITC now and defending it, IMHO. Moreover, just because Dept's current system of online ITC reconciliation does not catch such misuse of the facility to 'Re-claim ITC in genuine situations permitted under law', does not give 'these misuse of facility&#....
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....39; a legal sanctity for given situation under discussion here. Hence, I do not see any gain to the tax-payer to reverse subject ITC now u/s 17(5) with hope of re-claiming it in the distant future. Actually, such course of action can lead to loose-loose situation for the tax-payer (i.e. even when court rules in favor of tax-payer in future on the subject ITC under discussion here). It is better for any tax-payer to take definitive calls now about whether to take subject ITC or not, in my humble view, based on factors explained in my earlier post at Sr. No. 38. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Please read relevant line from my last post above as follows: Hence, I do not see any gain to the tax-payer to reverse subject ITC now either u/s 17(5) (i.e. under table 4(B)(1)) or as 'others' (i.e. under table 4(B)(2)) with hope of re-claiming it in the distant future. Reply By RaamSrinivasan Kalpathi: The Reply: I respectfully agree to disagree with the views of Shri.Amitji. As regards the construction industry every advocate/ CA whom this corresponde....
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....nt had spoken to or had the benefit of hearing their lectures have advocated this option of availing and reversing the credit under Table 4(b)(2) in the same month in R-3B and taking re-credit as when a favourable verdict emanates. Some of the speeches have been put up on you tube also. As already stated this correspondent is not an advocate and only makes an honest attempt to understand law. Reply By Amit Agrawal: The Reply: Dear Shri RaamSrinivasan Kalpathi Ji, You have every right to disagree with my views and legal reasoning behind them. After-all, majority of contributors on TMI tries his / her best while sharing own views on any controversial issues. And it is for the querist to choose best way forward at his own risk & rewards, depending upon various factors to be considered by him. Reply By Amit Agrawal: The Reply: By the way, I am expecting Apex Court to overrule Safari Retreats Private Limited - 2019 (5) TMI 1278 - ORISSA HIGH COURT. Reply By Alkesh Jani: The Reply: Dear Experts, Upon reviewing the views shared, I have a few queries that I wish to present for further clarification and discussion. Background: Section 17(1) of CGST Act, 2017: This section provi....
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....des that where goods or services (or both) are used by a registered person partly for business and partly for other purposes, the input tax credit (ITC) shall be restricted to the extent attributable to the business purposes. Section 17(6) and Explanation: The term "plant and machinery" refers to apparatus, equipment, and machinery fixed to the earth by foundation or structural support and used for making outward supply of goods or services. It includes such foundation and structural supports but excludes: * Land, building, or other civil structures; * Telecommunication towers; * Pipelines laid outside factory premises. Furthermore, for clauses (c) and (d), "construction" includes re-construction, renovation, additions, alterations, or repairs, to the extent of capitalization, to the said immovable property. Definitions: * Section 2(107): "Taxable person" refers to an individual who is registered or required to be registered under section 22 or section 24. * Section 2(83): "Outward supply" for a taxable person refers to the supply of goods or services, whether by sale, transfer, barter, exchange, license, rental, lease, or any other mode in the course or furtherance o....
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....f business. Query: * Is a lift installed in a building considered independent of the civil structure, and does it require capitalization under Section 17? * If the lift installed is treated as plant and/or machinery, how does it align with the definition of "outward supply" under the Act? What type of goods or services are deemed to be provided in this context? * What would be the appropriate HSN code for the outward supply related to the installation or use of the lift? I look forward to your valuable insights and thank you in advance for your guidance on this matter. this query is purely for my knowledge purpose. Thanks again. Reply By Amit Agrawal: The Reply: Dear Shri Alkesh Jani Ji, I feel that your queries are recycling of 'areas of controversies' involved in the subject matter of ITC and I have already shared by views thereon in series of earlier posts above. Still, let me answer queries raised by you once again: Queries: 1. Is a lift installed in a building considered independent of the civil structure, and does it require capitalization under Section 17? My view: Lift can be called as 'permanent fixture of building'. But c....
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....alling it 'permanent fixture of building' itself means it is otherwise 'separately identifiable immovable property' from 'a civil structure of building'. And, separately identifiable immovable property (i.e. Lifts / elevators) fits perfectly into the explanation defining P&M for taking ITC even if it excludes 'buildings'. B2.1 'Fixture' is defined in Oxford Language as follows: a piece of equipment or furniture which is fixed in position in a building or vehicle B3. Thus, what is excluded from P&M is 'Civil structure of Building' and NOT P&M (i.e. Lift / Elevators) which is installed / erected in such buildings. Kindly refer to my post above at Sr. No. 30 (read with post at Sr. No. 26) for more details. C. Section 17 does NOT prescribe mandatory capitalization of lift under the head 'Building'. Such treatment depends upon applicable accounting standards (along-with income tax & other law's provisions (if any)). Kindly refer to my post above at Sr. No. 34 for more details. 2. If the lift installed is treated as plant and/or machinery, how does it align with the definition of "outward supply" under the Act? Wh....
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....at type of goods or services are deemed to be provided in this context? My views: Yes. Nature of supply depends upon 'terms & conditions of agreement' with tenant / user of lift, read with Section 2(30) of the CGST Act, 2017. One of the possibility is explained by me in my posts at Sr. No. 9 read with Sr. No. 13. 3. What would be the appropriate HSN code for the outward supply related to the installation or use of the lift? My views: Nature of supply & appropriate HSN Code depends upon 'terms & conditions of agreement' with tenant / user of lift, read with Section 2(30) of the CGST Act, 2017. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Alkesh Jani: The Reply: Dear Shri Amitji, Thank you for your prompt and insightful response. Based on your explanation, I have summarized the key points as follows: * The lift qualifies as "Plant and Machinery" under the applicable definition. * It is independent of the civil structure or building and is considered separate immovable property. * There is no requirement to capitalize the lift in the books of account. * Th....
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....e nature of outward taxable supply can be determined by the terms of the agreement between the tenant/user of the lift. However, I would like to seek further clarification on a few additional queries: * Since a lift is not classified as machinery, should it be treated as "Plant"? If we categorize it as Plant, does it cease to be considered immovable property since Plant is recognized as "Goods" under the Act? In such a case, do we treat the lift as goods ? * In the absence of a specific contract, can the outward supply of the lift be interpreted as the service of carrying passengers? In such a scenario, would the taxable value be determined by fees charged for transporting passengers from the ground floor to the desired floor? can the lift service be free for members but chargeable for visitors? * If capitalization of the lift is not required, would it still fall within the ambit of "input" for the purpose of claiming input tax credit (ITC)? * If no charges or consideration are received from either members or visitors, can we classify the use of the lift as being outside the definition of "Supply" under the CGST Act? If so, how would....
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.... input tax credit be claimed in such a case, considering there is no supply for which the ITC can be utilized? * On basis of which documents, (invoice or debit note) ITC can be claimed? I am seeking clarity on these aspects for my future reference and knowledge, as it may help me handle similar cases more effectively. Thank you in advance for your guidance and insights. Reply By Amit Agrawal: The Reply: Dear Shri Alkesh Jani Ji, As desired, I am answering points raised in your last post (I am reproducing your entire post below in italics, putting my views in straight-line). Some points are repeated in my answers and same are lengthy in nature (& my apologies in advance for the same). This is due to the fact that you have raised multiple questions which are overlapping in nature (& some are open ended or with wrong / incomplete understanding of what I stated above) and I wanted to answer every question independently & very detailed manner: "Thank you for your prompt and insightful response. Based on your explanation, I have summarized the key points as follows: * The lift qualifies as "Plant and Machinery" under the applicable definition. - Yes, as per exp....
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....lanation given below Section 17(6) read with 'sub-clause (c) & (d) of Section 17(5) & explanation given thereunder'. * It is independent of the civil structure or building and is considered separate immovable property. - I never said that lift is independent of building (i.e. lift has independent existence from building). What I said that (in context of discussing ITC against Lifts) that 'remarks / observations made by Apex court in various rulings' (which are quoted by other contributors above in multiple posts) has no relevance what-so-ever for determination of subject issue under discussion here. For that, I quoted well-settled position of law about to read and treat any judgement as 'judicial precedent' in my post at Sr. No. 26 above and further explained my views about its plications for issue under discussion here in my post at Sr. No. 30 above. Now, coming back to issue under discussion here (i.e. ITC against lifts), I only said that lift has 'separately identifiable immovable property' from 'a civil structure of building'. Without prejudice, I would further add now here that lifts / elevators are 'separately identifiable immovable propert....
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....y' even within 'overall building' in common parlance (For example: Brake-down / Collapse of lift in a accident' is NOT equated with 'Break-down / Collapse of Building' in common parlance). And, hence, such 'separately identifiable immovable property' (i.e. Lifts / elevators) fits perfectly into the explanation defining P&M for taking ITC even if it excludes 'buildings' per se. Please see my post at Sr. No. 30 above for more details. * There is no requirement to capitalize the lift in the books of account. - I never said that. I only said that whether same should be capitalized either under the head 'Building' or 'P&M' should be looked into as per applicable accounting standards (& IT & Co. law provisions, as & if applicable). And I prefer capitalization of lift under head P&M (though same is not compulsory for my views about ITC eligibility) if there is no bar to do so (& nobody till date, could point out 'specifics' to me barring such treatment). I wish to again point to my post at Sr. No. 34 above for more details. * The nature of outward taxable supply can be determined by the terms of the agreement between the tenant/user of the ....
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....lift. - What I said was that 'Nature of supply depends upon 'terms & conditions of agreement' with tenant / user of lift, read with Section 2(30) of the CGST Act, 2017.' Kindly allow me further elaborate what I said. There are different practices followed in the industry in this regard. One of the possibilities is explained by me in my posts at Sr. No. 9 read with Sr. No. 13. Other practice in the industry, which I am well aware of, is that there are separate entities (individual owners of property like shops / premises / entire are floor etc.) providing rental services and 'common facilities (like lift & operation & maintenance, security, DG back up & so on)' are provided by society (or builder, if society is not yet formed) having over-all ownership / possession & control of building per se. Even if 'owner' of multiple premises (i.e. shops / offices / individual floors) in a building and entire building as a whole is one & same person, such arrangement (separate charge for common facilities i.e. in addition to lease / rental charges) is perfectly legal and regularly followed in the industry in their natural course of business. However, I would like to ....
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....seek further clarification on a few additional queries: * Since a lift is not classified as machinery, should it be treated as "Plant"? If we categorize it as Plant, does it cease to be considered immovable property since Plant is recognized as "Goods" under the Act? In such a case, do we treat the lift as goods ? Question is not relevant from GST point of view in context of sub-clause (c) & (d) of Section 17(5) and classification of 'lift' between 'machinery & plant' is irrelevant for my views. There is only one term used 'Plant & Machinery' there which is also an immovable property. If lift per se is 'goods' (which it is not), then, there is no need for this on-going lengthy debate at all as exclusion from ITC under sub-clause (c) & (d) of Section 17(5) will not apply to 'movable goods'. Furthermore, I do not see any provision under GST law which says 'plants' has to be movable & thereby goods. * In the absence of a specific contract, can the outward supply of the lift be interpreted as the service of carrying passengers? In such a scenario, would the taxable value be determined by fees charged for transporting pass....
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....engers from the ground floor to the desired floor? can the lift service be free for members but chargeable for visitors? My views are not based on supplies made to third parties like visitors etc. or some fancy structuring of subject transaction i.e. renting. Provision of Lift with its operation & maintenance (plus other common facilities (if any) like DG back up, security & son on) is facility provided by owner to tenant along-with possession & usage of its premises (say, individual offices / shops / entire floor etc.) and these premises are in turn from part of larger building. Once agreement states so (w.r.t. situation like there is no specific agreement, which is unlikely because same is legally binding from stamp duty / other laws. Moreover, any tax-payer who is willing to defend ITC following judicial process, should be also willing to keep proper records (i.e. agreement etc.) as it is responsibility of tax-payer claiming ITC to prove supporting factual position in support), then, it does not matter if owner charges "separately" for lift usage & its maintenance or same is included in 'rental / lease charges'. This is in view of Section 2(30) of the CGST ....
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....Act, 2017 and same fulfils requirements of explanation to the effect that lift/s are used for making outward supply of goods or services or both (for explanation given u/s 17(6)). Composite supply of renting of premises (i.e. shop / individual office/s / entire floor) along-with common facilities like provision of lift (& its operation & maintenance etc.) are two different supplies which are naturally bundled with each other where renting of premises is principal supply. This does NOT mean that lifts are NOT used for making outward supply as Section 8 of the CGST Act, 2017 cannot be used to deny the fact that under composite supply, 'two or more supplies' are always provided by the supplier which are naturally bundled with each other u/s 2(30) and there is no compulsion under GST Law that composite supply cannot be for single consideration. As far as industry practice goes in any large commercial complexes / malls etc, there is always 'separate charge' (in addition to rentals) for 'common facilities (such as lift and its operation & maintenance, security, DG sets etc') and this practice of rental-agreement is preferred (though not compulsory for views about ITC against li....
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....fts) wherever tax-payer intents to avail ITC against lift. * If capitalization of the lift is not required, would it still fall within the ambit of "input" for the purpose of claiming input tax credit (ITC)? I never said that. I only said that whether same should be capitalized under the head 'Building' or 'P&M' should be looked into as per applicable accounting standards (& IT & Co. law provisions, as & if applicable). And I prefer capitalization of lift under head P&M (though same is not compulsory for my views about ITC eligibility) if there is no bar to do so (& nobody till date, could point out 'specifics' to me barring such treatment). I wish to again point to my post at Sr. No. 34 above for more details. * If no charges or consideration are received from either members or visitors, can we classify the use of the lift as being outside the definition of "Supply" under the CGST Act? If so, how would input tax credit be claimed in such a case, considering there is no supply for which the ITC can be utilized? - There is no supply without any consideration involved here. Lift is a facility provided by owner to tenant along-with pos....
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....session & usage of its premises (say, individual offices / shops / entire floor etc.) and these premises are in turn form part of entire building. Once agreement states so, then, services of provision of lift (& its operation & maintenance) (plus other common facilities, if any, like DG back up, security & on on) is part of 'composite supply u/s 2(30) of the CGST Act, 2017' from owner to tenant where renting of premises / shops will be principal supply. This does NOT matter if contract does not show 'separate consideration' for such supply by way of services of provisions of lift (& its operation & maintenance) or not. Showing no separate consideration in the agreement does NOT mean that there is no consideration for provision of lifts & its operation & maintenance etc. This is also in view of Section 2(30) of the CGST Act, 2017 and same fulfils requirements of explanation to the effect that lift/s are used for making outward supply of goods or services or both and there is no compulsion under GST Law that composite supply cannot be for single consideration. As far as industry practice goes in any large commercial complexes / malls etc, there is always 'separate charge' ....
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....(in addition to rentals) for 'common facilities (such as lift and its operation & maintenance, security, DG sets etc') and this practice of rental-agreement is preferred (though not compulsory for views about ITC against lifts) wherever tax-payer intents to avail ITC against lift. * On basis of which documents, (invoice or debit note) ITC can be claimed?" - Please see Section 16(2)(a) of the CGST Act, 2017 read with Rule 36 of the CGST Rules, 2017. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Alkesh Jani: The Reply: Dear Shri Amitji, Thanks for your prompt reply. Thanks Again Reply By Sadanand Bulbule: The Reply: Dear all ITC on lift-- tsunami of divergent researched opinions are running in parallel on the same query. The effect is, there is no unanimity on legal position. I feel this bitter truth really is stranger than fiction. Democracy guarantees freedom of expression. Everyone has to respect it. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear all Experts, Installation of the lift in the building is not eligible to avail ITC since it is treated as part of immova....
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....ble property. It is blocked u/s 17(5) (d). During the VAT period also, there were cases of ITC disallowance. With regards. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, I think opposite sides of views on subject ITC are thoroughly presented on this discussion forum along-with legal reasoning backing such views. And both sides (i.e. contributors who feel subject ITC is available and contributors who feel subject ITC is not available) are not willing to change their position as they truly believe in respective position taken by them on the subject matter W.r.t. your last post above, kindly let us know 'relevant provisions of VAT' under which subject ITC was denied along-with sample case-laws thereof. This will help us to compare current gst provisions under discussion (i.e. sub-clauses (c) & (d) of Section 17(5) read with explanations given thereunder where ITC against construction of 'immovable property including land, building or any other civil construction' is denied while simultaneously 'P&M' was excluded from 'immovable property'). If similar provisions were existing under VAT laws & there are case-laws denying IT....
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....C using those similar provision, same will be very directly helpful to take this discussion towards some conclusion. Thanking you in anticipation! Reply By Amit Agrawal: The Reply: Also, I wonder how VAT tax-credit provisions & cases-laws thereof will be directly relevant in the situation under discussion here where issue is 'services' provided & not 'goods' sold. Anyway, I will wait for clarity (i.e. 'relevant provisions of VAT' under which subject ITC was denied along-with sample case-laws thereof) as requested in above post. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear Amith Agarwal Ji, Sir, The query is about GST paid on Lift. Here I am quoting three Advance Ruling cases referring to Sec. 17(5)(d) of the CGST Act. Regarding cases under the VAT period, I have to verify the re-assessment orders which are not readily available now. 1. The Maharashtra AAAR ruled that no Input Tax Credit (ITC) can be claimed on Lift Installation Charges. In the Judgment of M/S Las Palmas Co-operative Housing Society Ltd. (2020 (9) TMI 1144 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA). The AAAR ruled that the Appellant would not be eligible to av....
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....ail the ITC in respect of the GST paid to the lift contractor, in terms of Section 16(2)(b) read with Section 17(5)(d) of the CGST Act, 2017 2. AAR of MP in the case of M/s. Jabalpur Hotels Pvt. Ltd. 2020 (7) TMI 476 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH). In this, the AAR finds that the lift consists of components or parts (goods) like lift car, motor, ropes, rails etc. and each of them has its separate identity prior to installation and when they are assembled/installed together they create lift. It is held that the lift has become part of the building and ITC shall not be available in terms of Section 17(5)(d) of the CGST Act, 2017. 3. Tarun Realtors Private Limited (2019 (10) TMI 1021 - AUTHORITY FOR ADVANCE RULING, KARNATAKA). In this case, the installation of the lift is treated as blocked credits u/s 17(5)(d). Expecting more clarity on the issue. With respects. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, I have already dealt with these GST AAR / AAR rulings in my earlier posts above (specially at my post at Sr. 26, 30 & 32) and explained my reasons for disagreement with them. I further elaborated my views and reasoning while a....
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....nswering various questions put by Shri Alkesh Jani Ji in my posts at Sr. No. 47 & 49 above. As you mentioned about some VAT cases on similar issue in your post at Sr. No. 52 above, I had sought clarity there-against. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear Amit Agarwal Ji, The two cases of ITC disallowed pertaining to the VAT period are referred to here. 1. M/S.FERNS ICON VAT TIN-29980819608. Assessment Period: April 2017 to June 2017 ITC was disallowed on the purchase of the lift installed for the building on lease rent on the grounds that "the lift is a part of the building, not a separate unit and not separable from a building and does not have an identity when removed from the building. Besides, the lift does not coming under the category of Plant & Machinery." 2. M/s Aurbis Business Parks Private Ltd. [GSTN- 29AAPCA0762R1ZV,] Adjudication order for the period 2017-18. Engaged in the business of letting sub-lease rental of Commercial office premises for monthly consideration. ITC disallowed on the grounds that "Irregular availment of Transitional Credit on the capitalized goods including intangible services, for the renovation of leased hold bui....
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....lding and all the construction activities including capitalized intangible services. There are other similar cases squarely applicable to the query. This is for your perusal and further comments. With respects. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, Kindly provide TMI citations for said two rulings, so as to provide my comments thereon. Without going through full contents of such rulings, it is difficult - at-least for me - to offer comments thereon. W.r.t. first case quoted by you where period of April, 2017 to June, 2017 is mentioned & hence, assuming that said case is not denial of transitional credit using GST provisions, I wish to know under 'legal provisions of VAT' which are used to use such ITC. I like to see if they have different from 'other quoted AAR / AAAR' in their logic & legal reasoning to deny subject ITC. If they are using very same Apex Court rulings & observations made therein to deny subject ITC, then, my reasons for disagreement with them is already explained in my earlier posts here (specially at my post at Sr. 26, 30 & 32 read with 47 & 49). If there is anything new in referred rulings compared to &#....
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....39;other quoted AAR / AAAR' in their logic & legal reasoning to deny subject ITC, I will look into them and offer my comments. Reply By VENU K: The Reply: The beauty of law is that it is amenable to differing interpretations and there is no universal truth as far as legal issues are concerned. This is amply clear from the fact that many High Court decisions are routinely overruled by the Supreme Court. This in itself does not make the original decision of the High Court illegal or delivered without understanding the law in any way. So it is futile to look for the last word in law. Supreme Court becomes the final authority , just because there are no higher authorities which we could approach. We have had many instances where higher benches of the Supreme Court overturning decisions of lower benches. So, according to me .... in litigation TRUTH does not matter but FACTS do. And in each case the facts and circumstances could be different, what was pleaded by each side could be different. So each judgement is unique in its own way and all judgements are made with the caveat....... In the facts and circumstances of the case ............ So unless there is a judge who has an aut....
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....hority to pronounce a final judgement after hearing both sides , whether we like it or not, legal deliberations would continue endlessly till eternity. Reply By Sadanand Bulbule: The Reply: Dear all Whatever comments I have posted so far on this Discussion Forum is not because I am an expert but being a seriously concerned person to uphold the system of equity to all the stakeholders in the GST era. Law belongs to all in the same ratios. No one owns it per se. So the TMI visitors are at liberty to express their views openly without any restriction or hesitation. I am sure this would buttress the discussion forum on the queries in a more democratic way. It is the basic decency of public platform. By the way, every seed has a chance to take strong root. So also every opinion has the power to free the querists from concern. Let our comments be the new content rather than old container. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Yes, Sir. Agreed but at the same time we have to keep the essence of original thoughts intact. It must not be eclipsed by any decision of any court or any person. Reply By Sadanand Bulbule: The Reply: Dear Sethi Sirji One should not r....
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....epeat the same " mantra" till cows come back. Reply By KASTURI SETHI: The Reply: Sh. Sadanand Bulbule Ji, Sir, I agree. You are absolutely right. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear Sri Amit Agarwal Ji, Sir, In response to the Sl. No. 58, I am submitting the information available for me. The orders under the Karnataka VAT Act were uploaded to the departmental website "e-filing system". It does not bear TMI Citation. I tried to collect the information but the order copy was unavailable since it is password-protected and presently inoperative. However, I will explain the précised facts briefly. Ferns Icon:- The Firm is engaged in leasing movable and immovable properties. There was a purchase of the lift for installation for the building owned by "M/s Ferns Builders & developers' which was let on lease rent. The purchase details are as follows. Inv. No. Date Description of goods Rate of tax Input tax Invoice value KA01INMAJ161000482 20-10-2016 Modernisation Johnson Ele. Lift to Sy. No. 28 Ferns Icon 14.50% 63509 590386 KA01INMAJ161200611 06-12-2016 Passenger Lift-Electric Enduronic Lift 14.50% 63467 59000 During the VAT period, ....
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....the firm though purchases were declared in the return has not claimed the ITC since it was not eligible. When the GST was introduced the firm availed the ITC through transitional credit on the contention that Sec. 10 of the CGST Act-2017 for taking CENVAT credit in respect of Capital goods not carried forward in a return as per the provisions of Sec. 140(2) of the said Act also quoted the provisions that " the registered person shall not be allowed to take credit unless the said credit was admissible in a CENVAT credit under the existing Law and is also admissible as input tax credit under this Act." The department rejected the claim on the grounds that the firm was a service provider only and the copy of the return produced Form ST-3 was related to services only. The goods purchased were electrical goods such as panels, cable, motor and lift. There were also purchases of consumable goods like bleaching powder, garbage cover, broom, sponge etc. The electrical goods are not eligible for input tax as per Schedule V of the KVAT Act and the consumables are not for further sales but for own use. Therefore he is not eligible for transitional credit under GST not being eligible to carr....
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....y over input tax credit/CENVAT credit under the existing Law. There were also references made to Sec. 17(5)(d) in rejecting the lift. From the above instance, the ITC was not allowed on the lift during the VAT period. With regards Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, Thanks for your effort in digging out contents of said order. In continuation of what I said in my posts at Sr. No. 53, 54 & 58 above, I have noted following line from your post at Sr. No. 64 (i.e. reason for denial of credit under VAT regime) read with Section 140 (2) of the CGST Act, 2017 (i.e. reason to deny such 'VAT credit' under GST Regime during transition): "The department rejected the claim on the grounds that the firm was a service provider only and the copy of the return produced Form ST-3 was related to services only." These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By RaamSrinivasan Kalpathi: The Reply: The Supreme Court has pronounced the landmark Safari Retreats judgment on Oct 3, 2024 on denial of ITC on Construction of Immovable Property. Whilst upholding th....
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....e constitutional validity of Sec.17(5)(d), Hon'ble Supreme Court clarified that the renting of a building could qualify as a "plant" exception under Section 17(5)(d) of the CGST Act is significant for businesses involved in leasing immovable property. By accepting the assessee's claim to ITC on GST paid for building construction, the court has provided relief in scenarios where the constructed property is essential to the taxable activity, such as renting. In summary, while the court rejected the constitutional challenge, it provided relief to taxpayers by holding that ITC is allowed for construction activities that qualify as "plant or machinery," based on the facts of each case. Tax authorities will need to determine eligibility on a case-by-case basis. Reply By Amit Agrawal: The Reply: Para 66 & 67 of above-said ruling dated 03.10.2024 by the Apex Court states as follows: "66. In the light of what we have held above, by setting aside the impugned judgment in Civil Appeal Nos. 2948 and 2949 of 2023 - 2024 (10) TMI 286 - SUPREME COURT, the writ petitions are remanded to the High Court of Orissa for limited purposes of deciding whether, in the facts of the case, th....
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....e shopping mall is a "plant" in terms of clause (d) of Section 17(5). Appeals are partly allowed in above terms. 67. While deciding these cases, we cannot make any final adjudication on the question of whether the construction of immovable property carried out by the petitioners in Writ Petitions amounts to plant, and each case will have to be decided on its merit by applying the functionality test in terms of this judgment. The issue must be decided in appropriate proceedings in which adjudication can be made on facts. The petitioners are free to adopt appropriate proceedings or raise the issue in appropriate proceedings." By reading the entire ruling, I believe that it gives lots of 'additional' grounds of defense for taking ITC against 'Lifts installed in commercial building given for rent' (For example: Non-applicability of 'explanation' itself which is given after Section 17(6) while trying to deny ITC u/s 17(5)(d) by proving the lift in itself is 'immovable' 'plant or machinery' with help of supporting facts & circumstances). Moreover, it opens up a real possibility of taking ITC against construction of 'Building' itse....
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....lf by applying the functionality test and same will be depend on facts & circumstances in each case. Once thing, which is clear at-least for me, is that various AAR / AAAR ruling quoted in various posts above (in support of denial of ITC against lifts) deserves to be completely ignored while taking all these call. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Another thing which is also clear (at-least to me) is that various Apex Court rulings, which are quoted earlier in various posts above - do NOT have any bearing on subject of issue under discussion here what-so-ever. It simply does not matter that 'Lifts are part of building or permanent fixture of building etc.' while taking subject call under discussion here. Apex Court has now clearly held that one can possibility of taking ITC against 'Construction of Building' itself by applying the functionality test and same will be depend on facts & circumstances in each case If anything, various court rulings from erstwhile regime read with this latest latest Apex Court ruling can be applied to demo....
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....nstrate that such lilts are indeed 'Plant' in the context under discussion here. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Apex Court has not only overruled Safari Retreats Private Limited - 2019 (5) TMI 1278 - ORISSA HIGH COURT (which had read down those provisions) but went for beyond that by explaining difference between 'Plant & Machinery' and 'Plant or Machinery' while applying clause (c) & (d) of Section 17(5). In this ruling, there are so many judgements quoted, relied upon & explained by Apex Court in the context of dispute before it which in-turn gives fairly broad range of legal arguments to justify ITC against lifts for situation under discussion here. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Just an update on my three posts above: Para 65 of the this Apex Court ruling is also very worth noting: "65. Some of our conclusions can be summarised as under: a. The challenge to the constitutional validity ....
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....of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act is not established; b. The expression "plant or machinery" used in Section 17(5)(d) cannot be given the same meaning as the expression "plant and machinery" defined by the explanation to Section 17; c. The question whether a mall, warehouse or any building other than a hotel or a cinema theatre can be classified as a plant within the meaning of the expression "plant or machinery" used in Section 17(5)(d) is a factual question which has to be determined keeping in mind the business of the registered person and the role that building plays in the said business. If the construction of a building was essential for carrying out the activity of supplying services, such as renting or giving on lease or other transactions in respect of the building or a part thereof, which are covered by clauses (2) and (5) of Schedule II of the CGST Act, the building could be held to be a plant. Then, it is taken out of the exception carved out by clause (d) of Section 17(5) to sub-section (1) of Section 16. Functionality test will have to be applied to decide whether a building is a plant. Therefore, by using the functionality ....
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....test, in each case, on facts, in the light of what we have held earlier, it will have to be decided whether the construction of an immovable property is a "plant" for the purposes of clause (d) of Section 17(5)." These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: W.r.t. my views shared earlier (i.e. ITC is available against 'a centralised airconditioning plant' installed in the building, on similar reasoning applied for 'ITC against lift' as per query raised), I want to draw your attention to COMMISSIONER OF INCOME-TAX, AP VERSUS TAJ MAHAL HOTEL (1971 (8) TMI 2 - SUPREME COURT) where Apex Court observed the followings: "Now it is well-settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it ........... ............................ The heating installation, of a building may be passive in the sense that it involves no moving machi....
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....nery, but few would deny it the name of 'plant'. The same thing could, no doubt, be said of many air conditioning and water softening installations." These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: For query raised by the querist (i.e. ITC against lifts), using recent Apex Court ruling in case of M/S SAFARI RETREATS PRIVATE LTD. & ORS (2024 (10) TMI 286 - SUPREME COURT) read with observations from case of TAJ MAHAL HOTEL (1971 (8) TMI 2 - SUPREME COURT) quoted by me in earlier post, I would refine my earlier views & reasoning as follows: Lifts / elevators are 'separately identifiable immovable property' even within 'overall building' in common parlance (For example: Brake-down / Collapse of lift in a accident' is NOT equated with 'Break-down / Collapse of Building' in common parlance, Lifts needs separate 'maintenance contract' with specific differentiated requirements and same does not get covered in 'house-keeping or maintenance contract' for building etc.). And, hence, such 'separately identifiable immovable property' (i.e.....
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.... Lifts / elevators) fits perfectly into "Plant' (being construed in its popular sense if it is a word of every day use. Popular sense means that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it). In other words, calling them 'Lift / Elevator' itself means that it is 'plant or machinery' & not 'building' in popular sense while applying either clause (c) or (d) of Section 17(5). Hence, IMHO, subject ITC under discussion is indeed available. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: W.r.t. my views shared earlier (i.e. capitalisation of 'lift' either under 'Building' or 'Plant & Machinery' in tax-payer's books of accounts does not matter for issue under discussion here), following observations by Apex Court from case of TAJ MAHAL HOTEL (1971 (8) TMI 2 - SUPREME COURT) are worth noting: " ............The Tribunal rejected the appeal holding that the definition of "plant" must necessarily be the same, whether it was for claimin....
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....g depreciation under section 10(2)(vi) or for development rebate under section 10(2)(vib) ............. .................................. The High Court was right in not accepting the reasoning of the Tribunal based on the rates relating to depreciation under section 10(2)(vi) and the assessee having claimed that the sanitary and pipe-line fittings fell within the, meaning of "furniture and fittings" in rule 8(2) of the Rules. It has been rightly observed that the Rules were meant only for the purpose of carrying out the provisions of the Act and they could not take away what wag conferred by the Act or whittle down its effect. If the assessee had claimed higher depreciation allowance that would not detract from the meaning of the word "plant" in clause (vib) of section 10(2)." Thus, Supreme Court has ruled that two different classification i.e. "furniture and fittings & "plant" for very same asset (i.e. sanitary and pipe-line fittings) while allowing same tax-payer 'two different benefits' under very same Income Tax Act. Here, the tax-payer is giving differential treatment in two different acts (i.e. income tax & GST). And hence....
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...., there is no legal bar in applying differential classification for very same asset (i.e. Lifts) while taking legally available benefits in two different act. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By KALLESHAMURTHY MURTHY: The Reply: The Hon'ble Supreme Court delivered the judgment in the Civil Appeal No. 2948 of 2023 in the case of M/s Safari Retreats Private Ltd. - 2024 (10) TMI 286 - SUPREME COURT, who was engaged in constructing a shopping mall to lease out to different tenants, focusing on the constitutional validity of Sec. 17(5)(c) & (d) of the CGST Act which restricts the availment of ITC. The court has observed that sub-section (c) used the phrase "Plant & Machinery" whereas Sub-Sec. (d) used the phrase "plant or machinery". These phrases have different meanings and reject the plea of the Company to read "or" as "and". The court rationally held that a building or immovable property could be classified as a plant if it is integral to business operations, such as in cases where a mall or warehouse is essential for supplying services (r....
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....enting) subjected to determine it by applying the functionality test. The court referred to the common understanding of a plant--whether it is movable or fixed to the earth. Items like equipment, machinery, or structural supports that are fixed but integral to the nature of business qualify as plant this may include lift also. It has been remanded back to the Odissa High Court to determine the issue accordingly. Though this has appeared to be given relief to the availment of ITC, it is subject to the determination of the Hon'ble HC Odissa. Hence the Hon'ble Supreme Court has not conclusively given Judgement entirety to avail the ITC on construction materials used in the Building until it is decided whether it is a plant and the lift attached to the building is treated as a plant as part of the building or still, it holds as not having an identity on collapse or demolish of the building. This is as understanding of the Judgement by me. Reply By KASTURI SETHI: The Reply: Sh.Murthy Ji, Sir, The best analysis by you. Indirectly Hon'ble Supreme Court has upheld the constitutional validity of Section 155 of CGST Act. The ball is in the High Court again and the person ....
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....taking ITC has to conform to the parameters laid down by Hon'ble Supreme Court. Reply By KALLESHAMURTHY MURTHY: The Reply: Respected Kasturi Sethi ji, It is your grace, Sir. Thanks so much. The ultimate result is indeed left to the taxpayer to prove the burden of availment of ITC as per section 155. Reply By KASTURI SETHI: The Reply: Dear Sh. Kalleshamurthy Murthy Ji, Yes. Your observation is correct. The judgement is not a green signal. The person who intends to take ITC is in the 'whirlpool' of terms / conjunctions /words, 'plant' 'machinery', 'building', 'or' 'and ''in the course of business', 'furtherance of business' etc. Reply By Sadanand Bulbule: The Reply: Dear all The Safari Retreat judgement of SC is a candle on the wall. It is not a " retreat " to the intending taxpayers. They have to undertake tough "tax safari" in the jungle of complicated litigation. Reply By Amit Agrawal: The Reply: Apex Court has made it clear that The expression "plant or machinery" used in Section 17(5)(d) cannot be given the same meaning as the expression "plant and machinery" defined by the explanation to Section 1....
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....7. There is difference between treating 'Entire Building including Lift Installed within it' as 'Plant' and 'Only Lift Installed in Building' as 'Plant'. And subject matter under discussion here is latter (i.e. 'Only Lift Installed in Building' & not entire building). While apex court has remanded back the matter to determine the former (i.e. 'Entire Building including Lift Installed within it'), various reasoning adopted by it to arrive such ruling along-with various cases-laws relied by it makes it clear (at-least to my mind) that 'Only Lift Installed in Commercial Building Given on Rent' is a 'Plant' based on 'functionality' test. This has been explained by me in my post at Sr. No. 77 & 78 above (read with my earlier posts). I also believe that Apex Court has made it simpler to take ITC against goods / services used in construction of 'Shopping Mall / Warehouse / Commercial Buildings / Factory to be given on lease / rental / license'. This can be more complicated for 'Income Tax Purpose' (as 'depreciation' related provisions are different with different objectives). But, for GST ....
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....purpose, this will be relatively simpler. All such tax-payer needs is to involve expert consultant to guide. It would be much better to get such an expert during building construction stage itself as well as before entering into lease / rental / license agreements. This in-turn will help tax-payer to prove eligibility of ITC against goods / services used in construction of those buildings using 'functionality' test. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear Sirs, Well said by Sri Sadanand Bulbule Sir, in simple words but intuitively. Reply By Amit Agrawal: The Reply: In my last post above at Sr. No. 79, please read relevant line in the third para as follows: This has been explained by me in my post at Sr. No. 71 & 72 above (read with my earlier posts). Reply By KALLESHAMURTHY MURTHY: The Reply: Sri Amit Agarwal Ji, Sir, I read again your expressions in posts 71, 72 and 79 which are close to the Judgement. Thanks for your views. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, Thank you for re-reading my po....
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....sts and putting an unbiased effort with fresh eyes to understand my legal reasoning behind those views! It is more heartening to know that you find my those views closer to Apex Court ruling!! Reply By Sadanand Bulbule: The Reply: Dear all With huge respect to recent Hon'ble SC judgement in Safari Retreat - 2024 (10) TMI 286 - SUPREME COURT case, I am of the clear opinion that, it has created more uncertainty than one could imagine. My 4.5 decades experience says that, often " remedy is worse than disease". So one must be very cautious before applying the said judgement. It is likely that tax officers may twist the arms mercilessly if such ITC is taken for granted. ITC is like a drug that creates in the user a need for larger and larger doses. Reply By Amit Agrawal: The Reply: Deal All, In M/S SAFARI RETREATS PRIVATE LTD. & ORS (2024 (10) TMI 286 - SUPREME COURT), Supreme Court of India has literally given CRASH-COURSE about how to interpret taxation statutes which is as under: (I am sure some will still NOT agree with many points mentioned in below re-produced crash-course despite being well-settled legal position by none other Apex Court of India & they wil....
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....l continue giving vague / general statements, fear-mongering etc., though they will not give any legal reasoning to explain why they do not agree with Apex Court. They will keep interpreting taxation laws based on their own perceived self-serving legislative intendment / assumptions or presumption & so on): "RULES REGARDING THE INTERPRETATION OF TAXING STATUTES 25. Regarding the interpretation of taxation statutes, the parties have relied on several decisions. The law laid down on this aspect is fairly well-settled. The principles governing the interpretation of the taxation statutes can be summarised as follows: a. A taxing statute must be read as it is with no additions and no subtractions on the grounds of legislative intendment or otherwise; b. If the language of a taxing provision is plain, the consequence of giving effect to it may lead to some absurd result is not a factor to be considered when interpreting the provisions. It is for the legislature to step in and remove the absurdity; c. While dealing with a taxing provision, the principle of strict interpretation should be applied; d. If two interpretations of a statutory provision are possible, the Court ordina....
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....rily would interpret the provision in favour of a taxpayer and against the revenue; e. In interpreting a taxing statute, equitable considerations are entirely out of place; f. A taxing provision cannot be interpreted on any presumption or assumption; g. A taxing statute has to be interpreted in the light of what is clearly expressed. The Court cannot imply anything which is not expressed. Moreover, the Court cannot import provisions in the statute to supply any deficiency; h. There is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly; i. If literal interpretation is manifestly unjust, which produces a result not intended by the legislature, only in such a case can the Court modify the language; j. Equity and taxation are strangers. But if construction results in equity rather than injustice, such construction should be preferred; k. It is not a function of the Court in the fiscal arena to compel the Parliament to go further and do more; l. When a word used in a taxing statute is to be construed and has not been specifically defined, it should not be interpreted in accordance ....
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....with its definition in another statute that does not deal with a cognate subject. It should be understood in its commercial sense. Unless defined in the statute itself, the words and expressions in a taxing statute have to be construed in the sense in which the persons dealing with them understand, that is, as per the trade understanding, commercial and technical practice and usage." These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Dear Shri Sadanand Bulbule Sir, This is with regards to your comments in post at Sr. No. 84. Are you (being a senior retired Govt. Officer yourself) suggesting that any Department officer will twist the arms of tax-payer, that too mercilessly, just because the tax-payer takes credit ITC by following law as it stands while taking ITC & when such law is duly interpreted by Apex Court? ITC is benefit given to tax-payer by our Government/s by passing laws in Parliament / State assembly. How such benefit can be called as 'drug' given by any Government to its citizens (i.e. tax-payers)? Reply By KALLESHAMURTHY MURTHY: The Reply: ....
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....Sri Amit Agarwal Ji, Sir, There is a Judgement by the Hon'ble Apex Court regarding ITC. It is furnished below for the last lines of your postings in Sl. 86. Hon'ble Apex Court held In the case of M/S. TVS Motor Company Ltd. vs The State of Tamil Nadu And Others, 2018 (10) TMI 887 - SUPREME COURT, read as under: "After discussing certain judgments of this Court and other High Courts, the Court has observed that the legal position was that the right to claim ITC is not a vested right or an indefeasible right." From this perspective, the ITC is a compensatory measure granted by the legislature. Can this be considered a general Rule? Thanking you. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, My post at Sr. No. 86 is purely limited to & in context of what was said in post at Sr. No. 84. Kindly do not read in that post anything beyond that. Reply By KALLESHAMURTHY MURTHY: The Reply: Sri Amit Agarwal Ji, Sir, This is a reply to Post 88. I am not commenting on the post at Sl. No. 86. My doubt is whether the Legislative intent can be generalised in all the cases of ITC availment with the Judgement referred to by me in Sl. No. 87. With r....
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....egards. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, Sir, in your post at Sr. No. 87, you have said as follows: 'It is furnished below for the last lines of your postings in Sl. 86.' Anyway, coming to your query at last post, I do not know the content & context of said ruling. Hence, I can not give any definitive answers. All I can say that it is well settled position of law that 'the right to claim ITC is not a vested right or an indefeasible right' and tax-payer can take ITC as allowed under law. Kindly do not equate 'Law' with 'Legislative intent'. And for this, I again draw your attention to sub-Para (a) & (b) of Para 25 (along-with other sub-paras thereunder) of Supreme Court ruling which is re-produced in my post at Sr. 85 above. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Dear Shri KALLESHAMURTHY MURTHY Ji, This is in continuation to my last post & in context of answering your query. 'Some observations made by Courts in particular context & in particular sets of legal provision & dispute ....
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....before it' can not taken as 'position of law in each & every context & even under different sets of legal provision'. How to read & apply court rulings and well settled legal principals therefor is explained by me in my earlier post at Sr. No. 26 above. In that post at Sr. No. 26, I had explained why all these rulings of Apex court / AAR / AAAR (which are also quoted by many contributors in earlier posts) do NOT have any bearing what-so-ever on subject of issue under discussion here what-so-ever (i.e. availability of ITC in context of sub-clauses (c) & (d) of Section 17(5) read with explanations given thereunder). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Sadanand Bulbule: The Reply: Dear Sri.Amit ji Thank you so much for your response on my last post. Clarification to your post at Sl No. 86: ITC per se is the backbone of any ad valorem taxation system and it is a benefit by way of rebate. But it is conditional subject to restrictions imposed. That being the legal position, one can not avail ITC the way he desires. If he does so, it intoxicates him like drug and pushes h....
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....im in the jaws of law. Therefore the restrictions are imposed. The word "drug" is therefore used by me in this, it being cancerous to economy of the country. It should never be allowed to spread. If one looks at the volume of "improper ITC" these days, it is not easy to imagine its volume. So one must read the word "drug" in broader terms and not in dictionary meaning. As an ex-taxman, I have been coming across cases where improper ITC is being availed by taking a "chance" and obviously against the law. In tax administration, universally there is "carrot & stick" policy, which echoes there is no way other than twisting the arms of the wrongdoers. Carrot is always assured for 100% law compliants and judiciary is also in favour of it. "Stick" means twisting the arms of wrong doers, of course not physically. The decision of the public authorities is supposed to be made solely on the basis of law and in the public welfare. You may visit my expressions critically and find they are purely pro-law/pro taxpayers and not to suit preconceived notions. I am not afraid to highlight the authorities whenever they are found on the wrong side of law. And I have been doing it ....
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....on TMI regularly, sometimes in unpleasant words. So my advice to taxpayers is their decision to avail ITC should be prudent, efficient and economical. Such decisions cost them nothing. This is the ultimate mantra of Hon'ble SC judgement in Safari Retreat case to go by facts alone. Through this discussion, I am placing the expectations and expressions of all the stakeholders to ensure long term equity. There is nothing to please or displease any one. That's all. I seek your comments. Reply By KALLESHAMURTHY MURTHY: The Reply: Sri Amit Agarwal Ji, Sir, This is what I want clarification. AAR and AAAR and in some Court Judgements are confined to particular cases and circumstances. Thanks a lot. Reply By Amit Agrawal: The Reply: Dear Shri Sadanand Bulbule Sir, With respect, I would differ with you on lot many things here and my views are summarized as under: No officer can twist the arms of tax-payer, that too mercilessly (even in non-physical way). Officer needs to always act within four concerns of law. And tax-payer has right to defend himself judicially in each & every case. ITC cannot be equated with Drugs' in any sense. What is allowed under law can be taken by....
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.... tax-payer, irrespective of what any officer might thinks about intention / equity etc. This is called as 'tax-planning' and not taking drugs. Of-course, if any ITC is wrongly taken, action as permitted under law can be & must be taken by departmental officer. W.r.t. subject matter under discussion & associated issues including implications of M/S SAFARI RETREATS PRIVATE LTD. & ORS (2024 (10) TMI 286 - SUPREME COURT), ITC in given situations can be legally defended in my view which are explained thoroughly in my earlier posts. And in my post at Sr. No. 78 above, I also explained need to have 'expert consultant' since beginning if any tax-payer wants to take ITC in those situations. And till this moment, no-one else have not given me any legal reasoning or argument to change them in any way. And I cannot argue on generic comments of 'facts' (or some other open-ended comments) when I know how to pass 'functionality' test' explained by Apex Court in the various situation discussed earlier. So, I do not find any need what-so-ever to fear about Dept's officer's potential legal actions (say, proceedings u/s 73 or 74) while taking such ....
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....ITC what-so-ever. I would imagine that any expert consultant / lawyer will defend his client taking such ITC through judicial means (why I feel so, because I am myself confident defending such clients). Now, after this Apex Court, I become much more certain in successfully defending my client taking such ITC under current laws specially after understanding what Apex Court ruled in above case and knowing fully well how to pass 'functionality' test' & prove 'Shopping Mall / Warehouse / Commercial Buildings / Factory to be given on lease / rental / license' as 'Plants'. With warm regards. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Please read relevant lines from my above post as follows: And till this moment, no-one has given me any legal reasoning or argument to change them in any way. And I cannot argue on generic comments of 'facts' (or some other open-ended comments) when I know how to pass 'functionality' test' explained by Apex Court in the various situation discussed here. Reply By Sadanand Bulbule: The Reply:....
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.... Dear Sri. Amit ji I have lot to post on abuse of ITC even by so called elite class of people. TMI being public forum, I restrain myself to make further statements about it. By the way I respect the right of freedom of expression. Unless there are dissent opinions, there is no salt & pepper in discussion. Keep posting your perceptions. Let the visitors gain more knowledge from all windows. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, This is with reference to your post at serial no.96 dated 7.10.24. A perusal of your replies posted in this forum till date proves that you are synonymous with congenial atmosphere, discipline, sportsman spirit, brotherhood, friendly attitude, egolessness, altruism, patriotism. Your replies stand for achieving fair justice for the Trade & industry and at the same time these are meant for safeguarding revenue in the interest of nation also. Nobody can deny this. Your replies speak volumes of the above. Reply By Amit Agrawal: The Reply: Dear Shri Sadanand Bulbule Sir, W.r.t. your response in post at Sr. No. 96 read with 92 & 84, my views are as under: A. You could not point any abuse of ITC what-so-ever by the tax-payer i....
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....n subject matter/s under discussion here. B. 'Tax Terrorism' is something India is infamous for. And despite Apex court ruling favoring tax-payer, using the the words like ' twisting the arms of tax-payer', 'ITC is like drug' (that too, openly on a public forum) reminds me that 'Tax Terrorism' still exist in India. B1. But, I do know how deal with such threats professionally using judicial means and same will not scare me helping clients to take all benefits allowed under law. I believe every other expert worth his salt in this field feels the same way. C. Right of freedom of expression is granted to everyone by our Constitution. And I just exercised that right while positing this. With warm regards. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Please read Para B from my last post as follows: B. 'Tax Terrorism' is something India is infamous for. And despite Apex court ruling favoring tax-payer, using the the words like 'twisting the arms of tax-payer mercilessly', 'ITC is like drug' by a senior retired....
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.... government official (that too, openly on a public forum) reminds me that 'Tax Terrorism' still exist in India. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, Please refer to your post at serial no.84 dated 07.10.24. From the above post, I infer that you have sincerely and truly cautioned all the stake holders to be more careful while availing ITC on the basis of the judgement of Hon'ble Supreme Court in the case of Safari Retreat reported as 2024 (10) TMI 286 - SUPREME COURT. There is nothing wrong in advising the tax payers to be pro-active so that none should be a victim of avoidable litigation. We cannot forget that the ultimate purpose of every querist here is to avoid litigation. Nobody likes litigation. We only lay the foundation for the querist and final decision is to be taken by the querist himself/herself. (Already mentioned in my earlier replies.) The idiom, 'twisting the arms' used signifies that none should be a victim of any bitter experience with the department. Thus it is also sincere advice to all the visitors by you. Sir, I could not understand the usage of the word, 'drug'. here. Naturally, here 'drug' d....
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....oes not mean the 'use of substance'. I know you have used it as a metaphor. How metaphor is applicable here and with what message ? Pl. throw light for enrichment of my knowledge. Endless thanks from my whole heart in advance. K.L.SETHI Reply By Sadanand Bulbule: The Reply: Dear Sir " Darkness cannot drive out darkness. Only light can do that". --- Martin Luther King Deeply obliged Sir. To be continued---. Reply By Amit Agrawal: The Reply: Sir, Kindly also give 'legal reasoning' explaining how there is 'Abuse of ITC' which will lead with 'twisting the arms of tax-payer mercilessly' by tax-Department in the context of situations under discussion here (i.e. taking ITC in view of Section 17(5)(d) as interpreted by Hon'ble Supreme Court in the case of Safari Retreat reported as 2024 (10) TMI 286-SC by passing 'functionality test'). With greatest respective, I would humbly submit that metaphor or generic / vague / open ended statements does not substitute 'legal reasoning' to claim 'Abuse of ITC' requiring 'twisting the arms of tax-payer mercilessly' by tax-Department. Thank you! Reply By Sadanand B....
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....ulbule: The Reply: Dear all My post at Sl No. 84: The intrinsic intent embedded here is a word of caution not to take ITC for granted. Rather it is to double check the entitlement before one ventures for it. Admittedly the subject judgement is not a signed blank cheque for taxpayers to write any amount. So there is every possibility of its wishful interpretation by both sides which should not push them in troubled waters again. Coming back to the word 'drug', it has multiple shades both positive and negative. In the context of on going discussion, we have to prudently derive its positive meaning rather than focusing only on its negative shade. Of course one's thinking pattern decides it and one person cannot think for another. So it need not be blown disproporntionately, lest readers should get confused. In a plant, both rose flowers and thorns grow together. Both have mutual purpose. So also, ITC being a very delicate matter, it cannot be taken for granted. If taken for granted, Section 74, 122, 132 and many more jump into the play. Can these sections be called threatening by the legislature? Can an abuser plead like that in the court of law? Never. So these sect....
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....ions are there to protect ITC, among other things. The bottom line here is, a stich in time saves nine. Secondly no one can obstruct the taxpayers availing ITC as per law. The pathway is clear, smooth and after SC judgement it is made wider also. Now it is the choice of taxpayers to choose what is legal and safer for them. With this I conclude and welcome all experts to make it more brainstorming. Reply By Amit Agrawal: The Reply: Dear Shri Sadanand Bulbule Sir, Thank you for your response. I again found no legal reasoning what-so-ever in your post explaining how there is 'Abuse of ITC' which will lead with 'twisting the arms of tax-payer mercilessly' by tax-Department in the context of situations under discussion here, even though I had specifically requested them. And I cannot comment on metaphor or generic / vague / open ended statements by treating them as 'solid legal reasoning'. And in earlier posts, I already said what I believed in & still believes in. Hence, I refrain from commenting anything further. Moreover, I noted two line from your post (i.e. Secondly no one can obstruct the taxpayers availing ITC as per law. The pathway is clear....
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...., smooth and after SC judgement it is made wider also.) which is something I can wholeheartedly agree with. This is precisely the point/s I was making in all my earlier the posts here (i.e. starting with ITC against Lift in given situation and then, ITC against Building/s in given situations). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, Metaphors and simile are figures of speech and these make the messages crystal clear. So these are very useful in understanding the essence of the sentence where these are fitted in. So the usage of both the above phrases/words is not misfit here. Reply By Sadanand Bulbule: The Reply: Dear all I came across an analysis on recent Safari Retreat judgement and its conclusive part is extracted hereunder: "This emphasis on favouring taxpayers in ambiguous situations also reflects a protective stance toward individuals and businesses against arbitrary or unfair tax claims. It creates an environment where taxpayers can operate with greater certainty and less fear of unexpected liabilities arising from ....
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....ambiguous provisions". So this is what I was canvassing throughout my posts especially at Sl. No. 84 onwards, may be in different version. And the niddle of entire discussion pointed at the same theme. That's all. Reply By Amit Agrawal: The Reply: Dear All, When this discussion started, many contributors quoted numerous Supreme Court rulings (besides so many AAR / AAAR which relies those SC rulings) to say that ITC against lift cannot be claimed. At that time, their sense was that that is well settled position of law and how can someone argue against their views. And contributors like me (who always believes that ITC against lift is available in given situation) had a very hard time on explaining why numerous Supreme Court rulings (so many AAR / AAAR which relies those SC rulings) are NOT judicial precedent for issue under discussion here. Our views were countered using generic statements such as the followings: Interpretations cannot tinker the well settled law per se, Legal battle is more preferable than legal adventure, what is legally correct is in the lap of time & so on. Ignoring those statements, I continued explaining various facets & solid legal reasoning behind p....
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....osition taken by me. After recent Safari Retreat ruling by SC which directly deals with clause (c) & (d) of Section 17(5), few among those holdings the view that 'ITC against lift cannot be claimed' stopped quoting any ruling or provide any legal reasoning to justify their stand. But ironically, they now refused to treat ruling as 'judicial precedent' for various issues under discussion here. Instead they started attacking Apex Court itself, again without providing any legal base to do so. They did not follow RULES REGARDING THE INTERPRETATION OF TAXING STATUTES which is beautifully summarized in Para 25 of said ruling. Not stopping there, they then started issuing threats to the the tax-payer ('twisting the arms of tax-payer mercilessly' by tax-Department, ITC is like drugs, Abuse of ITC) who will be taking ITC by relying on this SC ruling, that too, without providing any legal base to do so. Everything is done by completely discarding well-settled legal principals of Apex court (including protective stance toward individuals and businesses against arbitrary or unfair tax claims from Tax-Dept. when two interpretation is possible) and somehow, they con....
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....tinue defend their views with metaphor or generic / vague / open ended statements. This is despite the fact that I clearly said that such tax-payer should take assistance of an expert consultant since beginning of construction project before taking ITC against any building while relying on this ruling. I also explained that such expert will ensure passing of 'functionality test'. That's all! Reply By Amit Agrawal: The Reply: This is how 'Tax Terrorism' actually works and why India gets blamed for it from time to time. But & as said before, I do know how deal with such threats to my clients professionally using judicial means and same will not scare me in helping clients to take all benefits allowed under law. I believe every other expert worth his salt in this field feels the same way. Reply By Alkesh Jani: The Reply: Dear All, I would like to extend my gratitude to all the experts for their thorough deliberation on this issue. The Hon'ble Apex Court has delivered its verdict and has remanded the case back to the Hon'ble High Court. Now, we must await the decision of the Hon'ble High Court, which may either remand the case to the Original Ad....
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....judicating Authority or the Appellate Authority for the purpose of conducting the "functionality test." Should the case be remanded, the respective authority will issue a fresh order. Alternatively, if the High Court chooses to pass the order itself, we will need to wait for it, as it will provide greater clarity on the application of the functionality test. In summary, we must await the final order from the appropriate legal authority. Until then, the decision of the Apex Court should serve as a guiding principle, as the matter cannot be said to have attained its finality or has not yet reached its conclusion. In light of the above, I suggest that we may consider this issue concluded for now and reopen the discussion once the proper order has been passed. With this, I conclude my part in this discussion. Thank you. Reply By Amit Agrawal: The Reply: Dear Shri Alkesh Jani Ji, I agree with you except the following: A. Apex Court ruling is 'guiding principal' only from point of proving 'functionality test'. B. Apex Court has settled the legal controversy about what sub-section (3) &(4) of Section 17(5) & explanation given thereunder actually means ....
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....and how to apply the same. C. Any expert worth its salt will prove 'functionality test' though this aspect can see around round of litigation ... one way or other. C1. But, looking at benefits to the tax-payer which will be very substantial, the tax-payer should not be afraid of any such the litigation but should seek advice from an expert in this field of GST from initial stage of construction of the project itself. So unless someone wants to counter, I also conclude my part in this discussion. Thank you. Reply By Amit Agrawal: The Reply: For my last post above: These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Dear All, By the way, I am working on the following questions: A. Weather SC was correct in excluding 'a hotel or a cinema theatre' from getting treated as 'Plant' for purpose of GST (i.e. Reading of case of Anand Theatres & with the case of Karnataka power corporation, in the context of gst provisions)? B. Weather SC was correct in remanding the matter back to HC under undisputed facts noted in Para 2 of the order, instead of di....
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....rectly allowing ITC to the said tax-payer? Of-course, these are merely 'questions' at this stage and I will let you know my views thereon once my study completes. Reply By Amit Agrawal: The Reply: *Whether & not Weather. Typo mistake ... apologies! Reply By Amit Agrawal: The Reply: Dear All, Sharing my views on second question first from post at Sr. No. 112 (i.e. Whether SC was correct in remanding the matter back to HC under undisputed facts noted in Para 2 of the order, instead of directly allowing ITC to the said tax-payer?)" (IF OBJECTIVELY SEEN, this post will give many of you a some of 'reasons' (not all reason) about 'why I am so confident to what-ever I said in my posts here from Sr. No. 67 to my post at Sr. No. 110' and how I have interpreted said Safari Retreat Ruling). Para 31 & 32 of judgement of Safari Retreat reported as 2024 (10) TMI 286-SC is worth noting: " 31. Now, we analyse clauses (c) and (d) of Section 17(5). Clause (c) applies when works contract services are supplied for constructing immovable property. The definition of "works contract" under Section 2(119) is extensive. It reads thus: ...........................
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............... Thus, in the case of works contract services supplied for the construction of immovable property, the benefit of ITC is not available. However, there are exceptions to clause (c). First is when goods or services, or both, are received by a taxable person for the construction of "plant and machinery", as defined in the explanation to Section 17. The second exception is where the works contract service supplied for the construction of immovable property is an input service for further supply of the works contract. 32. Clause (d) of Section 17(5) is different from clause (c) in various aspects. Clause (d) seeks to exclude from the purview of sub-section (1) of Sections 16 and 18, goods or services or both received by a taxable person to construct an immovable property on his own account. There are two exceptions in clause (d) to the exclusion from ITC provided in the first part of Clause (d). The first exception is where goods or services or both are received by a taxable person to construct an immovable property consisting of a "plant or machinery". The second exception is where goods and services or both are received by a taxable person for the construction of an immov....
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....able property made not on his own account. Construction is said to be on a taxable person's "own account" when (i) it is made for his personal use and not for service or (ii) it is to be used by the person constructing as a setting in which business is carried out. However, construction cannot said to be on a taxable person's "own account" if it is intended to be sold or given on lease or license.' As can be seen, the Apex Court explained various differences between clause (c) & clause (d) which is reproduced above. As per SC, one of exception to Section 17(5)(d) is where goods and services or both are received by a taxable person for the construction of an immovable property made not on his own account. Undisputed position from Para 2 of said ruling is as follows: "In Civil Appeal Nos. 2948 and 2949 of 2023, the first respondent is engaged in the construction of a shopping mall for the purpose of letting out premises in the malls to different tenants. Vast quantities of material, inputs and services are required for the construction of the malls in the form of cement, sand, steel, aluminium, wires, plywood, paint, lifts, escalators, air-conditioning plants, electrical e....
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....quipment, transformers, building automation systems etc., and also consultancy services, architectural services, legal and other professional services, engineering services and other services including the services of a special team of international designers specialised in the construction of Malls. These goods and services used in the construction of the mall are taxable under the CGST Act. It is the case of the first respondent that it has accumulated input credit of GST amounting to more than Rs. 34 crores by the purchase/supply of goods and services consumed and used in the construction of the shopping mall. At the same time, the first respondent's letting out of units in the shopping mall attracts CGST based on the rent received by the first respondent since it amounts to the supply of service under the CGST Act. Therefore, the first respondent was desirous of availing the Input Tax Credit (ITC) accumulated against the rental income received by it upon letting out the mall premises. According to the first respondent, when it approached the concerned authorities, it was advised to deposit GST on rent without deducting ITC because of the exception carved out by Section 17(5....
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....)(d)" As per Para 32, the Apex Court clearly held that 'construction cannot said to be on a taxable person's "own account" if it is intended to be sold or given on lease or license'. Thus, in given facts, it is clear that M/s Safari Retreat was NOT constructing shopping-mall on its "own account" as per reasoning given by the court in Para 32. One of the principles governing the interpretation of the taxation statutes, as Para 25(h) of said ruling, is 'there is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly'. It also held constitutional validity of clauses (c) and (d) of Section 17(5) and in Para 64, further held that its plain interpretation does not lead to any ambiguity, the question of reading down the provisions does not arise Hence, it is clear to me that ITC cannot be denied to said tax-payer u/s 17(5)(d) in given facts & circumstances IRRESPECTIVE of fulfilment of 'functionality test'. In other words, whether said 'shopping mall' is a 'plant' or 'building' is an "irrelevant question" in given fact & circums....
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....tances of the M/s Safari Retreat. Hence, in my humble view, the Apex Court seems to be erred (why the word 'seems' is explained afterwards) in remanding the matter back to the High Court under undisputed facts noted in Para 2 of the order. There was no need to carry out 'functionality test' under admitted facts. It should instead have directly allowed ITC to the said tax-payer in view of exception to Section 17(5)(d). One possible reason behind remanding back the matter could be that Court wanted to be sure about the 'facts' involved (i.e. actually intention behind construction was to lease or 'own use'). But, the Apex Court has not specifically so. But, other than Para 2 (which can be just submission by the parties involved or history in brief) which is not 'findings' by Apex court per se, it is worth noting that there is NO finding given in entire judgement about actual intention behind construction of subject shopping mall. Only way, as far as I can see, to justify such order about remanding back (& not treating it as 'error' by Apex Court) is to understand reason behind seeking 'functionality test' laid down by the Apex Court in the f....
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....ollowing way: * Once, the tax-payer proves that that actually intention behind construction was to only for leasing / renting / licencing & not "own use' by demonstrating the same with supporting evidences, this proof by-itself fulfils 'functionality test' and need NOT go into such other aspects of 'functionality test' at all, in my humble view. And blockage of ITC u/s 17(5)(d) will not apply. * Only when said shopping-mall is constructed by the tax-payer for his 'own use' (i.e. using that mall for selling various goods) & NOT with intention to 'renting / leasing / Sale', one need to carry out 'functionality test' to find whether shopping mall is 'plant' or 'building' for reasons explained above for the purpose of Section 17(5)(d). These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Amit Agrawal: The Reply: Please read last Para (i.e. Para B) of my last post above as follows: B. Only when said shopping-mall is constructed by the tax-payer for his 'own use' (i.e. using that mall for selling various goods) & NOT with intention to 'renting / leasing / Sale', one need to ....
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....carry out other aspects of 'functionality test' to find whether shopping mall is 'plant' or 'building' for reasons explained above for the purpose of Section 17(5)(d). Reply By sundar andco: The Reply: ITC can be availed on lift if the said capital goods is not capitalized in the books of accounts and lift can be treated as movable property and very vital for business purpose under Section 16. Now a days there are lifts that are movable properties. The said stand is an aggressive one which will get resolved only in HC/SC. Reply By Sadanand Bulbule: The Reply: Dear all By the way, what I feel is, this is unanswerable query at this point of time, if earlier discussions are not accepted unanimously. Every one has his/her own perception and they are right accordingly. Let the Hon'ble Orissa High Court decide it in pursuance of Apex Court's direction. And the ball rolls again in the domain of the adjudicating process to determine the facts via law through "merit prism". I commend the intense efforts of all experts. Reply By Amit Agrawal: The Reply: W.r.t. issue raised by the the querist (i.e. ITC against Lifts installed in commercial building on rent....
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....), there is no doubt left in my mind about availability of ITC against Lifts in given situation and SC ruling has made it more crystal clear by explaining 'functionality test'. My earlier posts has explained this. As a matter of fact, even 'building' can be 'plant' if it satisfies 'functionality test' as per SC. And it remanded back the matter for limited purpose of checking if "entire building" (shopping mall etc. other than 'a hotel or a cinema theatre' & NOT merely Lift installed in such buildings) as 'plant' by applying 'functionality test'. Any expert worth its salt will prove 'functionality test' in my view for shopping mall etc. And looking at benefits to the tax-payer which will be very substantial, the tax-payer should not be afraid of any litigation from revenue but must seek advice from an expert in this field of GST from initial stage of construction of the project itself. Such expert will ensure that malls / buildings so constructed passes 'functionality test' laid by SC. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or reco....
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....mmendation. Reply By Amit Agrawal: The Reply: Attention is invited to Supreme Court ruling in case of M/s Bharti Airtel Ltd., dated 20.11.2024 (reported as c - SUPREME COURT), wherein concept of movable property & immovable property is minutely explained by the Apex Court. It is a landmark judgement worth through reading as it's implications are very significant & far reaching under GST law wherever issue involved is Movable V/S Immovable Property. This ruling gives additional grounds in many situations to the tax-payer to defend ITC against blockage under clause (c) & (d) of Section 17(5) as for applicability of both clauses to deny ITC, underlying property has to be 'construction of immovable property' first. This ruling is directly help cellular & tower companies under GST (as mobile towers are held as movable property) thereby ITC blockage under clause (c) & (d) of Section 17(5) will NOT apply DESPITE the given explanation for 'Plant & Machinery' which specifically excludes 'telecommunication towers'. This ruling will also help tax-payers to avail ITC despite blockage under clause (c) & (d) of Section 17(5). For example: ITC against 'Fac....
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....tory Plants' can be claimed if it can proven that 'movable property' using yardsticks explained by SC. And, Safari Retreat reported as 2024 (10) TMI 286-SC can be used as additional defense (i.e. if it cannot be proven as 'movable property') by passing the 'functionality test' for such 'Factory Plant'. These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation. Reply By Sadanand Bulbule: The Reply: Dear all I wish to add here that, ITC benefit under Section 17[5][c] & [d] arising by way of Hon'ble Supreme Court's judgement rendered in Safari Retreat - 2024 (10) TMI 286 - SUPREME COURT case is not as easy as milking the cow or plucking the hanging fruits in the tree. Rather it is in the wisdom & discretion of the adjudicating authority. So taxpayers/professionals need not relax banking upon the ratio of the said judgement. They need to continue the fight against fallible orders to off load the burden of tax liability saddled on the taxpayer. Authority prevails over the rulings and not vice versa. Knocking the doors of court once again is only the remedy. I have no word....
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....s to describe such fallible orders, whether it is tax vulturism or what? Readers to decide it.<br> Discussion Forum - Knowledge Sharing ....