TaxTMI 
TaxTMI 
2025 (12) TMI 1721
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing a warehouse and need to purchase Cement, Steel, beam, column etc. for construction of the warehouse. They would also avail the Construction services for the same. As per the applicant, earlier the Input Tax Credit (ITC) on construction related material or services were covered under Block Credit under Section 17(5) of the CGST Act, 2017 and cannot be claimed even though the same was used for the furtherance of business. However, subsequent to the judgement of the Supreme Court in the case of Safari Retreats, they require an advance ruling in the matter. They have, therefore, sought an advance ruling on the following question:- Whether ITC is admissible for the goods or services utilized for the construction of warehouse or shed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e for the furtherance of business or for leasing it out to tenants. They also agree that ITC is blocked under Section 17(5) of the CGST Act, 2017 but in view of the judgement of Supreme Court in the case of Safari Retreats, the same is available by applying the functional use concept. 8. Since the applicant has relied upon the judgement of the Supreme Court in the case of Chief Commissioner of Central Goods and Services Tax Vs Safari Retreats Pvt. Ltd. [2024 (90) G.S.T.L. 3 (S.C.)], we deem it necessary to go through the judgement of Safari Retreats and the Supreme Court's interpretation of Section 17(5) on the issue. In Safari Retreats, the respondent was engaged in the construction of a shopping mall for the purpose of letting it out t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 17: Apportionment of credit and blocked credits.- * * (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :- * ** * (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Expl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and machinery' used in clause (c) of Section 17(5), plant and machinery excludes land, building or any other civil structures and therefore the ITC of the works contract services supplied for the construction of an immovable property, which in the case of the applicant is warehouse/shed is not available. 10. Coming to the blockage of ITC on the goods or services or both used for the construction of an immovable property on his own account, mentioned in clause (d) of Section 17(5), the Supreme Court held that since the exclusion is only for 'plant or machinery', which is not defined, the functionality test has to be applied. The Supreme Court further held that the question whether a mall, warehouse or any building other than a hotel or a ....