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The applicant is not eligible to claim credit of the GST charged by vendor for supply of goods and services to it, which are used for carrying out the activities (Civil Work and External Developmental Works) for setting up of MRO facility.

Input Tax Credit — Whether the applicant is eligible to claim credit of the GST charged by vendor at the time of supply of goods and services to it, which are used for carrying out the following activities for setting up of MRO facility which will be rented out: a. Civil Work b. External Developmental Works Held that :- The applicant's claim that Section 17 (5) (d) deals with unavailability of credit of inputs/ input services in case where the output is not taxable is only one dimension of the law. This is an implicit interpretation which is not the intentional outcome of the said section. The purposive dimension of the said section is blocking of credit for construction of immovable property. It is clear while going through the facts that, the activity has two phases viz. construction of immovable property and leasing of the same for MRO purposes. The question raised by the applicant regarding ITC is restricted with first phase of construction itself. Therefore, contention of the applicant that output supply which will take place post construction is taxable or not is immaterial in determining eligibility of ITC. The applicant is paying GST on goods and services supplied by M/s. Akanksha Contracts Pvt. Ltd. for construction of MRO facility on the applicant's land. The provisions of Section 17(5)(d) of GST Act, 2017 is clear that if the goods or services are used for the construction of an immovable property, the ITC shall not be available irrespective of the use of the said property. — Indag Rubber Limited, In Re… [2019] 17 TAXLOK.COM 118 (AAR-Rajasthan)
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