GST – ITC Is Available On Construction Of 'Plant' For Letting Out

The Supreme Court has held that if the building in which the premises are situated qualifies for a 'plant', Input Tax Credit (ITC) can be allowed on goods and services used in setting up the immovable property, which is a plant.

The Court in its decision dated 3 October 2204 was of the view that 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 Central Goods and Services Tax Act, the building could be held to be a plant, and consequently taken out of the exception carved out by clause (d) of Section 17(5) to Section 16(1).