Supreme Court Upholds Sections 16(4) and 17 of CGST Act; Clarifies Scope of ‘Plant’ in Safari Retreats Judgment

In one of the most anticipated judgments of on GST, Chief Commissioner of Central Goods and Service Tax vs M/s Safari Retreats Private Limited [TS-622-SC-2024-GST], the Hon’ble Supreme Court has upheld the constitutional validity of the clauses (c) & (d) of Section 17 and Section 16(4) of the CGST Act, 2017 has been upheld. However, the literal interpretation of “plant or machinery” in Section 17(5)(d) has offered some respite to the businesses who have incurred or will incur expenses in constructing buildings for the purposes of their businesses. The Apex Court held that even a building can be a “plant” under Section 17(5)(d) as long as it satisfies the functionality test and remanded the matters back to respective High Courts to decide the factual question of whether the structure built by the taxpayer qualifies as “plant”.