Safari Retreats and the Functional Plant Test: Rethinking Blocked Credits under GST

Introduction From its inception, the Goods and Services Tax (GST) was sold politically and constitutionally as a “good and simple tax” premised on seamless input tax credit (ITC) and tax neutrality. Yet some of the most litigated provisions in the regime are precisely those that block ITC, especially Section 17(5)(c)/(d) of the Central Goods and Services Tax Act, 2017 (CGST Act). The Supreme Court’s judgment in Chief Commissioner of Central Goods and Service Tax & Ors. v. Safari Retreats...