Itc on construction expenses -warehouses

In a development that may encourage increased investment in commercial real estate, the Supreme Court on Thursday gave the industry relief by permitting input tax credit (ITC) on construction expenses for buildings meant to be leased.

“If the construction of a building was essential for carrying out the activity of supplying services, such as renting or giving on lease or other transactions in respect of the building or a part thereof, which are covered by clauses (2) and (5) of Schedule II of the CGST (Central Goods and Services Tax) Act, the building could be held to be a plant,” said Justice Abhay S Oka and Justice Sanjay Karol.

This ruling is expected to ease the financial strain of rent on tenants occupying commercial space. Real estate companies stand to gain because buildings can now be categorised as plant and machinery. Additionally, this advantage is not limited to commercial real estate. Various industries will be able to claim ITC on rentals for commercial properties. The ruling suggests ITC will be available retroactively.

This is the ruling of Apex court in this regard.

You may see how much it will benefit you