TaxTMI 
TaxTMI 
TaxTMI 
Input tax credit on swimming pool
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....nput tax credit on swimming pool<br> Query (Issue) Started By: - vaibhav agrawal Dated:- 7-4-2025 Last Reply Date:- 23-4-2025 Goods and Services Tax - GST<br>Got 10 Replies<br>GST<br>Hello, Will ITC be available on construction of swimming pool in hotel or Water Park Reply By Sadanand Bulbule: The Reply: In terms of Section 17[5][d] of the CGST Act, ITC on construction of swimming pool, being immovable property, is blocked. Hence not eligible to claim ITC. Reply By YAGAY andSUN: The Reply: Yes, Input Tax Credit (ITC) under GST is generally available on the construction of a swimming pool in a hotel or water park, subject to certain conditions. Here's how ITC applies in such cases: * ITC Availability for Hotels and Water Parks: * If....
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.... the swimming pool is being constructed as part of the business activities of a hotel or water park, and the pool is intended to be used for making taxable supplies (e.g., providing services to customers for a fee), then ITC on construction-related expenses may be available. * In the case of hotels or water parks, the swimming pool would typically be considered a part of the amenities provided to customers, which forms a part of the taxable service. Since the construction is for business purposes, it is eligible for ITC on inputs and input services used in the construction. * Block Credit Restrictions: * However, there are restrictions under Section 17(5) of the CGST Act. ITC cannot be availed on the construction of "immovable propert....
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....y" for personal use or for purposes not related to business. This means that if the swimming pool is intended for personal or non-business use (e.g., a pool built in a residential property), ITC would not be available. * Additionally, for GST purposes, a swimming pool is considered an immovable property. But as long as it is for business use, particularly in the case of a hotel or water park, ITC would typically be available on inputs like cement, construction materials, and services related to the construction of the pool. * Use of the Swimming Pool: * If the pool is used for providing taxable services (e.g., entry fees for customers, providing facilities to guests), the expenses related to its construction will be eligible for ITC a....
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....s part of the overall taxable business activity. In conclusion, ITC on the construction of a swimming pool in a hotel or water park will be available, provided the pool is used for business purposes and generates taxable income. It's important to ensure proper documentation and adherence to GST compliance rules when claiming ITC. Reply By Sadanand Bulbule: The Reply: Dear Yagan Sir May I request you to revisit your reply as regards to the availability of ITC on swimming pool in a hotel? You are aware that, Section 17(5)(d) of the CGST Act has been retrospectively amended to nullify the Hon'ble Supreme Court judgement rendered in Safari Retreat case. In view of the impact of this retrospective amendment, can a swimming pool form " ....
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....plant and machinery"? If yes, can similar ratio be expanded to lifts, escalators, fire-fighting equipment, hotel buildings, malls, cinema halls, water parks and so on used in the course of business? Here the usage of such facilities in the furtherance of business and generation of taxable turnover is not a issue at all. Directly or indirectly, certainly they generate taxable turnover. The basic question is do such facilities form " plant and machinery" to qualify the entitlement of ITC on such facilities? Kindly distinguish the legal position of Section 17(5)(d) before and after its retrospective amendment. Since this is a burning issue with huge financial ramifications, I have posted this in the larger interest of all stak....
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....eholders. Your sagacious comments plz.. Reply By YAGAY andSUN: The Reply: Dear Sir, For your kind information. The Hon'ble Supreme Court in the case of M/s. Safari Retreats P Ltd [2024 (10) TMI 286 - SUPREME COURT] while analyzing the expression plant or machinery, held that there could be a plant that is an immovable property; that the word 'plant' not having been defined under the Act, its ordinary meaning in commercial terms will have to be attached to it. The Hon'ble Court, thereafter laid down a functionality test, further concluding that if a building qualifies to be a plant, ITC can be availed against the supply of services in the form of renting or leasing the building or premises, provided the other terms and conditions o....
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....f the CGST Act and Rules framed thereunder are fulfilled; that however, if the construction of a building by the recipient of service is for his own use, the chain will break, and ITC would not be available. https://www.taxmanagementindia.com/visitor/Detail_Case_Laws.asp?ID=759687 Regards, YAGAY and SUN Reply By Sadanand Bulbule: The Reply: Sir My essential question is, whether immovable property in any form constitutes "plant and machinery" to be entitled to avail ITC on goods and services or both used in the construction of such property under Section 17[5][d]? It remains unanswered. Consequent to the retrospective amendment to Section 17[5][d], the version of Safari Retreat case is demolished. And the department is determine....
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....d not to accept the old version culminating in the fastening of tax liability as 'blocked credit'. So expensive litigation is assured, in case of any deviation. Reply By YAGAY andSUN: The Reply: Law keeps evolve. Reply By vaibhav agrawal: The Reply: Dear All, Thanks for the reply Post retrospective amendment of Plant or Machinery to Plant and Machinery, still we can rely on M/s. Safari Retreats P Ltd [2024 (10) TMI 286 - SUPREME COURT] Judgement ? Also Plant and Machinery specifically excludes land, building or any civil structure so department might be reluctant on classifying swimming pool as part of building or civil structure ? Reply By KASTURI SETHI: The Reply: Post retrospective amendment of Plant or Machinery to....
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.... Plant and Machinery, still we can rely on M/s. Safari Retreats P Ltd [2024 (10) TMI 286 - SUPREME COURT] Judgement ? Reply : NO Also Plant and Machinery specifically excludes land, building or any civil structure so department might be reluctant on classifying swimming pool as part of building or civil structure ? Reply : Yes. No room for any doubt is left, especially, in view of comprehensive and to the point reply posted by Sh.Sadanand Bulbule, Sir. Reply By Sadanand Bulbule: The Reply: Dear Sirji Your reply has removed all the dark clouds surrounding the burning issue. Hope this helps stakeholders to plan tax incidence carefully. Reply By KALLESHAMURTHY MURTHY: The Reply: Dea....
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....r Sirs, I agree with the points raised by Sri Sadananda Bulbule Sir and the conclusion of Sri Kassturi Sethi Ji.<br> Discussion Forum - Knowledge Sharing ....