Page 32 - GSTL_3rd September 2020_Vol 40_Part 1

J14 GST LAW TIMES [ Vol. 40
the purpose of sale of the same post issuance of completion certifi-
cate, thereby terminating the tax chain, and by not applying Section
17(5)(d) to cases where the building in question is constructed for
the purpose of renting out the same and where the tax chain is not
broken. It is further submitted that if this interpretation of Section
17(5)(d) is not accepted, then there would be no alternative except to
declare that provision as unconstitutional and illegal and null and
void.
(iv) That it is further submitted that as the law was not clear the GST
paid for the purpose of construction and maintenance of warehouse
during the FY 2017-18 should be allowed to the applicant.
Discussion and findings
We have carefully gone through the application, provisions and submis-
sion of the applicant, we proceed to decide the case as under :-
(1) Vide above application, applicant want clarification on the ITC of
GST paid on goods and work contract services purchased/received
for construction and maintenance of warehouse which is used for
the purpose of renting out on which GST is paid.
(2) As per the Section 16 of CGST Act, 2017, every registered person
shall be entitled for ITC subject to such conditions and restriction as
may be prescribed. As per the Section 17(5) of CGST Act mentioned
above, the input tax credit shall not be available on the goods and
services or both received by a taxable person for construction of an
immovable property (other than plant or machinery) on his own ac-
count including when such goods or services or both are used in the
course or furtherance of business. The definition of immovable
property are as under :-
(3) According to Section 3(26) of the General Clauses Act, 1897, im-
movable property shall include land, benefits to arise out of land
and things attached to the earth, or permanently fastened to any-
thing attached to the earth”. According to Section 3 of the Transfer
of Property Act, 1882, immovable property means “immovable
property does not include standing timber, growing crops or grass”.
(4) We find that the applicant constructed the building/warehouse
which is a immovable property and as per the exclusion Section
17(5)(d) of CGST Act, 2017, the input tax credit is not available on
the goods and services used in construction of immovable property
as discussed below :-
(5) The Section 17(5) of CGST Act is an exclusion clause in spite of the
goods or services used in the course or for furtherance of his busi-
ness as the Section 16 of CGST Act, it is clearly mentioned that the
entitlement of ITC is subject to the condition and restriction. We
find that the view of applicant that they are entitled for ITC in view
of Section 16 is incorrect as per law. Further the applicant stated that
if the ITC is not allowed as per the Section 17(5)(d) then it is unwar-
ranted, unreasonable, arbitrary, unconstitutional, illegal, violation
of fundamental right, double taxation is baseless as the Section
17(5)(d) of CGST Act is very clear and there is no scope of interpre-

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