With regards to an issue of availing Input Tax Credit ( ITC ) under Goods and Services Tax ( GST ) on leasing the building for the schools, the Madhya Pradesh High Court directed file appeal before the appellate authority relying on law laid down by Supreme Court in the Safari Retreats Case. The petitioner, Chirantan Enterprises, engaged in the construction of non-residential properties, built a structure on their land and leased it to M/s Shishukunj Knowledge Society for running a school.

The petitioner had claimed ITC on the goods used in the construction of the building, which included materials such as cement, steel, and electrical equipment. Complete Draft Replies of GST ITC Related Notices, Click Here However, the Directorate General of GST Intelligence raised concerns and issued summons for the petitioner to provide financial details and account statements. Following these summonses, the petitioner was required to reverse the ITC availed for civil works, totaling Rs. 6.68 crore, for the financial years 2019-20, 2020-21, and 2021-22. The petitioner challenged the reversal and approached the High Court, arguing that under Section 17(5)(c) & (d) of the Central Goods and Services Tax (CGST) Act, they were entitled to claim ITC. The petitioner cited the Supreme Court’s ruling in the case of Safari Retreats Pvt. Ltd., which allowed ITC on immovable property used for leasing purposes if the property qualified as a “plant.”

However, during the proceedings, it was revealed that the petitioner had failed to appear before the adjudicating authority despite being provided multiple opportunities. The petitioner also did not submit documents, such as a lease agreement, to substantiate their claim. Justices Vivek Rusia and Binod Kumar Dwivedi noted that in the Safari Retreats case, the Supreme Court had held that if a building, such as a mall or other commercial premises, qualifies as a “plant,” then ITC could be claimed for the goods and services used in its construction.

The Court emphasised that each case requires a factual determination of whether the property meets the functionality test of being considered a plant. Complete Draft Replies of GST ITC Related Notices, Click Here The adjudicating authority had already issued a final order, and the High Court noted that the petitioner did not challenge this order in the current writ petition. Instead, the petitioner was directed to pursue an appeal before the appropriate appellate authority, where they could present all relevant documents and arguments, including the reliance on the Safari Retreats judgment. The petition was disposed of accordingly.