Indirect Tax Alert : Supreme Court upholds constitutional validity of Sections 17(5)(c), 17(5)(d) and 16(4) of CGST Act
The Supreme Court has upheld the constitutional validity of Sections 17(5)(c), 17(5)(d) and 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act). Further, the Supreme Court also clarified that the expression ‘plant or machinery’ used in Section 17(5)(d) of CGST Act cannot be given the same meaning as the term ‘plant and machinery’ defined in Explanation to Section 17 of CGST Act. The Supreme Court also emphasized that whether a mall, warehouse or any other building (other than a hotel or cinema theatre) qualifies as a ‘plant’ is a factual matter that must be assessed by applying the functionality test.
We, at BDO in India have summarised the above ruling. Hope you would find it timely and useful.