Where the building was constructed for the purpose of letting out and tax chain is not broken, the restriction under Section 17(5)(d) is not applicable – Orissa High Court

M/s Safari Retreats Private Limited [W.P.(C) No.20463 OF 2018 (High Court – Orissa)]

The Hon’ble High Court of Orissa in this case, has read down Section 17(5)(d) of the CGST Act by confining the provision only to cases where the building is constructed for the purpose of sale post issuance of completion certificate. Thus, it was held that where the building was constructed for the purpose of letting out and tax chain is not broken, the restriction under Section 17(5)(d) is not applicable. However, it should be noted that Section 17(5)(d) of the CGST Act has not been struck down, but its interpretation has been restricted to conclude that that letting out of property does not fall under the expression ‘own account’. Moreover, it needs to be seen, whether the Hon’ble Supreme Court would agree with the above view or not.

To read the complete judgment 2019 Taxo.online 245