GSTAT says GST Credit on Resort Construction Blocked Despite Taxable Business Use

In Flora Kingdom Farm Resort v. Commissioner of Commercial Taxes, Karnataka, the Tribunal held that the resort building was excluded from the definition of “plant and machinery” and that the functionality test discussed in Safari Retreats did not extend to hotel or resort buildings. Since construction was undertaken on the taxpayer’s own account, the remaining ITC was inadmissible. The Tribunal dismissed the appeal and sustained the tax, interest and penalty.