The CBIC Chairman, Sanjay Kumar Agarwal while addressing Press Conference Of 55th GST Council Meet said, “Error In Drafting GST Act, 2017”.

The Supreme Court in the case of  Chief Commissioner Of Central Goods And Service Tax And Ors. Versus M/S Safari Retreats Private Limited And Ors. has held that the term ‘Plant or Machinery’ used under Section 17(5)(d) is not defined anywhere but what is explained is ‘Plant and Machinery’.

Sanjay Kumar Agarwal while answering the question by a journalist regarding the Safari Retreats Judgement said that it was a pure drafting error because the term ‘Plant and Machinery’ have been used at 11 places, only in one place, it has been mentioned as ‘Plant or Machinery’, so that drafting error has now been corrected with effect from 1 July, 2017. This will require amendment in the GST Act”.

The GST Council has proposed amending the GST Act retrospectively to address the implications of the Supreme Court’s landmark judgment in the Safari Retreats case. In this judgment, the court applied the “functionality test” to determine the availability of input tax credit while distinguishing between the definitions of “plant or machinery” and “plant and machinery.”