Top Stories Supreme Court dismisses Safari Retreats Case Review Plea by GST Dept [Read Judgement] Even before the review petition was filed, North Block had begun working on a legislative end-run By Manu Sharma – On May 22, 2025 11:41 am – 2 mins read The Supreme Court has slammed the brakes on the Goods and Services Tax (GST) Department’s last-ditch attempt to reopen the landmark Safari Retreats ruling, dismissing the Centre’s review petition and leaving intact developers’ right to claim input-tax credit (ITC) on the construction cost of commercial properties that are leased out. The bench noted that, “We have gone through the review petition and perused the Judgment and Order dated 03 October 2024 which has been sought to be reviewed.

There is no error apparent on the record.” A Bench headed by Justice Abhay S. Oka and joined by Justice Sanjay Karol dealt with the petition in chambers on 20 May. In a terse order released on Wednesday, the judges said they had “gone through the review petition and the judgment sought to be reviewed” and found “no error apparent on the record.” The order concluded with three blunt words: “Review Petition dismissed.” The dismissal ends the Finance Ministry’s final judicial recourse against the Court’s 3 October 2024 decision in Chief Commissioner of CGST v. Safari Retreats Pvt Ltd. That 2024 verdict applied a “functionality test,” holding that a shopping mall—or any building that generates rental GST—can qualify as “plant or machinery” for the purposes of Section 17(5)(d) of the Central GST Act.

The ruling unlocked an estimated ₹30,000 crore in blocked credit across real-estate, warehousing and infrastructure sectors. The UAE Tax Law Is Evolving — Stay Ahead Before Clients Find Someone Who Already Is, Enroll Now Even before the review petition was filed, North Block had begun working on a legislative end-run. Clause 97 of the Finance Bill, 2025 proposes to replace “plant or machinery” with the narrower “plant and machinery,” retrospectively from 1 July 2017—exactly the wording the Supreme Court found too restrictive. Safari Retreats Pvt Ltd, an Odisha developer, first persuaded the Orissa High Court in 2019 that ITC should flow when a building is constructed for leasing rather than for the developer’s own use.

The Supreme Court’s 2024 ruling affirmed that approach, stressing that if a building performs the same function in a service supply chain as a machine does in manufacturing, credit denial would contradict the GST’s anti-cascading design. With Wednesday’s order, that reasoning now stands on the firmest possible judicial footing. Developers, real-estate investment trusts and infrastructure funds say the ruling removes a major financing hurdle and could revive stalled mall and logistics-park projects.

“Courts do not look kindly on attempts to neutralise decided cases retroactively,” a former Additional Solicitor-General told, predicting another round of writ petitions. Shares of listed mall operators such as Phoenix Mills and Nexus Select shot up 2–3 per cent in late trade after news of the dismissal, while infrastructure stocks with large leasing portfolios also gained. Analysts at ICICI Securities said the ruling “restores visibility on post-tax returns for income-generating real-estate assets.” For now, the Supreme Court’s two short sentences have given developers the last word; whether lawmakers will have the final say remains to be seen.