2025-VIL-216-AAR
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SGST Advance Ruling Authority

GST – Gujarat AAR - Input Tax Credit on construction of warehouse - Whether ITC eligible on the construction of the warehouse under Section 17(5)(c) of the CGST Act, 2017 – HELD - The Supreme Court in the case of Safari Retreats held that the expression "plant and machinery" used in Section 17(5)(c) has a plain and natural meaning as defined in the explanation to Section 17, which excludes land, building, or any other civil structures. Therefore, the ITC of the works contract services supplied for the construction of the warehouse is not available - The ITC is not admissible for the goods or services utilized for the construction of the warehouse or shed from which storage and warehousing services are provided as furtherance of business or provided on rent – Ordered accordingly - Whether ITC is available on the construction of the warehouse under Section 17(5)(d) of the CGST Act, 2017 – HELD - The Supreme Court in Safari Retreats held that the expression "plant or machinery" used in Section 17(5)(d) should be interpreted based on the functionality test. However, the Legislature has amended Section 17(5)(d) and substituted the words "plant or machinery" with "plant and machinery" with effect from 01.07.2017. The new explanation also clarifies that any reference to "plant or machinery" shall be construed as a reference to "plant and machinery", which is defined in the explanation to Section 17 and excludes land, building, or any other civil structures. Therefore, the applicant is not eligible to avail ITC on the cement, steel, beams, columns, and construction services used for the construction of the warehouse.
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