Orissa HC extends credit on input materials/services used for construction of shopping malls against CGST/OGST payable on rent received from tenants on account of letting of units in mall; Finds force in assessee’s plea that denial of ITC in respect of building meant and intended to be let out would amount to treating it as identical to a building meant and intended to be sold, and that the tax chain is not broken in cases where building in constructed for purpose of letting out; Further, notes assessee’s contention that treatment of these two different types of buildings as one for the purpose of GST is itself contrary to the basic principles regarding classification of subject matter of tax levy and, therefore, violative of Article 14 of the Constitution; Holds that the narrow interpretation put forward by the Department frustrates the very objective of the Act as assessee has to pay huge amount without any basis; Observes that, in the present case, assessee is retaining the property and not using it for his own purpose but letting it out on which he is covered under GST; Consequently, if the assessee is required to discharge GST on the rental income arising out of investment on which GST is paid, it is eligible to avail the ITC of GST; Concludes that, “provisions of Section 17(5)(d) is to be read down and the narrow restriction as imposed, reading of the provision by the Department, is not required to be accepted” : Orissa HC

Safari Retreats Pvt. Ltd. vs. Chief Commissioner of CGST