Page 166 - GSTL_23rd April 2020_Vol 35_Part 4

492 GST LAW TIMES [ Vol. 35
citizens shall have right to practice any profession, or to carry on any occupation,
trade or business. The restriction of said ITC would impose a wholly unwarrant-
ed and unreasonable and arbitrary restriction which would render building con-
structed for letting out uncompetitive, by imposing the burden of double taxa-
tion of GST on such buildings i.e. firstly, on the inputs consumed in the construc-
tion and thereafter on the rentals generated by the building.
5. The applicant intend to rely on the decision of the Hon’ble Orissa
High Court in the case of M/s. Safari Retreats Pvt. Ltd. [2019 (25) G.S.T.L. 341
(Ori.)], wherein at paras 19, 20 & 21 it is held that
“the provisions of Section 16(1)(2) where restriction has been put forward
by the Legislation for claiming eligibility for ITC has been described in Sec-
tion 16(1) and the benefit of apportionment is subject to Section 17(1) and
(2). While considering the provisions of Section 17(5)(d), the narrow con-
struction of interpretation put forward by the Department is frustrating the
very objective of the Act, inasmuch as the petitioner in that case has to pay
huge amount without any basis. Further, the petitioner would have paid
GST if it disposed of the property after the completion certificate is granted
and in case the property is sold prior to completion certificate he would not
be required to pay GST. But here he is retaining the property and is not us-
ing for his own purpose but he is letting out the property on which he is
covered under the GST, but still he has to pay huge amount of GST, to
which he is not liable.
In that view of the matter, in our considered opinion the provision of Sec-
tion 17(5)(d) is to be read down the narrow restriction as imposed, reading
of the provision by the Department, is not required to be accepted, inas-
much as keeping in mind the language used in (1999) 2 SCC 361 = 1999
(106) E.L.T. 3 (S.C.) [supra], the very purpose of the credit is to give benefit
to the assessee. In that view of the matter, if the assessee is required to pay
GST on the rental income arising out of the investment on which he has
paid GST, it is required to have the ITC on the GST, which is required to
pay under Section 17(5)(d) of the CGST Act.”
6. In view of the above, the applicant states that the principle laid down
by the Hon’ble Court (supra) squarely applies to the instant case and prays for
advance ruling in respect of the questions raised by them.
Personal Hearing/Proceedings held on 2-1-2020
7. Sri Sanjay Dhariwal Mandal, C.A., and duly authorised representa-
tive of the applicant appeared for personal hearing proceedings held on 2-1-2020
& reiterated the facts narrated in their application.
8. Findings & discussion :
8.1 We have considered the submissions made by the applicant in their
application for advance ruling as well as the submissions made by Sri. Sanjay
Dhariwal Mandal, C.A., & duly authorised representative of the applicant during
the personal hearing. We have also considered the issues involved, on which ad-
vance ruling is sought by the applicant, and relevant facts.
8.2 At the outset, we would like to state that the provisions of both the
CGST Act and the KGST Act are the same except for certain provisions. There-
fore, unless a mention is specifically made to such dissimilar provisions, a refer-
ence to the CGST Act would also mean a reference to the same provisions under
the KGST Act.
8.3 The applicant contends that they are engaged in the business of
renting of immovable property and is discharging the GST on the rental income
under the “Renting of Immovable Property” service. They procured different
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