Real estate moves Delhi HC over ITC issue
Many hotels, malls and real estate companies that were denied input tax credit under Goods and Services Tax (GST) mechanism in certain situations have dragged the government to court over the issue. A writ petition was filed in the Delhi High Court on Monday, challenging a change in the GST framework this year, whereby input tax credits were denied to real estate companies, hotels and malls in cases where construction is undertaken by the company itself, people familiar with the matter said. Tax experts said the phrase ‘on his own account’ in the GST law will need to be interpreted differently if one were to take input tax credit. Input tax credit refers to a mechanism under the GST framework wherein the tax a company pays when it purchases raw materials or other services can be passed on to the buyer when the goods or services are sold. Tax experts say that many companies were unable to claim credit when they themselves constructed malls, buildings or hotels.
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