Articles 8th Oct 2024
Our Partner Supreme Kothari has authored an article “Conjunctive Conundrum- ‘Or’ vs ‘And’- in the Safari Retreats Judgement” published on Taxsutra. The article critically analyses the recent Supreme Court ruling in the case of 𝘚𝘢𝘧𝘢𝘳𝘪 𝘙𝘦𝘵𝘳𝘦𝘢𝘵𝘴, wherein the Supreme Court has decided on the question of ITC availability on inputs used to construct immovable properties like malls and warehouses, excluding hotels or cinema theatres when used as ‘plant’. The Apex Court ruled that the question must be evaluated by the High Courts on a case-to-case basis based on three parameters: functionality, the nature of the supplier’s business, and the role of the building in that business.
In doing so, the Court differentiated the phrase ‘plant and machinery’ in explanation to section 17 from the expression ‘plant or machinery’ appearing in section 17(5)(d). This threadbare analysis delves into the aspects considered as well as principles applied to arrive at the findings. The article also discusses some of the open issues including fate of hotels and cinema theatres, admissibility of ITC on works contract services qua ‘plant’ under Section 17(5)(d) and the subjectivity and anticipated developments going forward.
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