Indian High Courts issue rulings on GST credit and tax appeals

Indian High Courts have issued significant rulings regarding Goods and Services Tax (GST) compliance and Input Tax Credit (ITC) eligibility.

The Madras High Court, in the case of ESNP Property Builder and Developers Pvt. Ltd. vs State Tax Officer, ruled on the eligibility of ITC for the construction of immovable property intended for leasing. Following the Supreme Court’s Safari Retreats precedent, the court emphasized that construction intended for leasing or licensing does not constitute construction ‘on own account’ under Section 17(5)(d) of the CGST Act. This distinction allows businesses to claim credit when the property is intended for taxable supplies like leasing rather than personal use.

Separately, the Telangana High Court granted relief to Karthikeya Construction regarding a GST adjudication order for the 2021–22 fiscal year. The court permitted the company to pursue a statutory appeal despite having an insufficient balance in its Electronic Cash Ledger. The court allowed the required 10% pre-deposit of outstanding tax dues to be paid from a bank account that had been under attachment.