GST DEPARTMENT FILES REVIEW PETITION ON SAFARI RETREATS SUPREME COURTS RULING
Diary No. - 1188/2025
CHIEF COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX vs. M/S SAFARI RETREATS PRIVATE LIMITED
The GST Department has filed a review petition in the Supreme Court to challenge the landmark decision in the Safari Retreats Pvt. Ltd. case. In the recent 55th GST Council meeting, the council decided to amend the GST law retrospectively to correct the “drafting error” in the legal provisions.
The original judgment had addressed the constitutional validity and interpretation of Section 17(5)(c) and (d) of the CGST Act, 2017, which restrict the availability of Input Tax Credit (ITC) on the construction of immovable properties.
The Supreme Court had held that immovable property could be considered a “plant” if it served a functional role in the business and had remanded the matter to the Orissa High Court for a factual determination in the specific case of Safari Retreats.
The main issue in the Safari Retreats Pvt. Ltd. case was the wording of Section 17(5)(d) of the CGST Act, 2017.
This section restricts claiming ITC on immovable property like buildings but the law uses the phrase “plant or machinery” in this clause, other parts of the GST law consistently use the term “plant and machinery.”
During a press conference after the 55th GST Council meeting, CBIC Chairman confirmed that there had been a drafting mistake in the law.
He explained, “The term ‘plant and machinery’ appears at 11 places in the GST Act but in one place, it was incorrectly written as ‘plant or machinery.’ This error is now being corrected with retrospective effect from July 1, 2017.”
To resolve the issue, the GST Council has proposed a retrospective amendment to the CGST Act. The amendment will replace the term “plant or machinery” with “plant and machinery” in Section 17(5)(d). The GST Department seeks to support this amendment and ensure it is upheld as constitutional by filing the review petition.
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