Input tax credit— Section 17(5) of CGST Act— The present appeal has been filed by the applicant by the appellant against the Advance Ruling order.

The Appellant’s appeal and the ground of appeal are that the restriction imposed under Section 17(5)(d) doesn’t come in the way of admissibility of the Input Tax Credit since the same applies only where a construction of immovable property is in one’s “own account”.

 And, there’s being a construction specifically oriented towards further leasing out of the premises, the ITC shall be admissible in accordance with the Hon’ble Orrisa High Court’s decision and this decision is binding on the lower appellate authorities, despite it having been passed by a High Court of difference jurisdiction.

The Appellant has pleaded that the multilevel storage facility developed with fabricated sheets fixed on nuts and bolts are ‘input’ for warehouse building. That, since the property has been constructed strictly in accordance with the prospective lessee’s requirements as ingrained in the terms of the agreement between the 2 parties, the same has not been constructed on their own account. That, thus, the restriction under Section 17(5)(d) doesn’t come in the way of admissibility of the Input Tax Credit (ITC)

In the instant case, the construction has been done by the Appellant for itself i.e. with all intentions to retain its ownership rights, and is only going to lease it to the other party. Thus the construction has been done, without any doubt, in the Appellant’s own account. The same, in the light of what is clearly expressed in Section 17, sub-Section (5), clause (d) ibid, is not entitled to ITC on the inputs/ input services.

Thus, the AAR has correctly observed that the applicant was engaged in the business of logistic services including warehouses constructed for the applicant’s business of letting out; that, Section 17(5)(d) renders ITC unavailable in respect of goods and services received for construction of immovable property(other than Plant and Machinery) on Taxpayer’s own account, including when such goods or services or both are used in the course of furtherance of business.

Held that— This authority dismiss the appeal and upheld the Advance Ruling dated 28.08.2020 as the same does not suffer from any infirmity or illegality.