The Tamil Nadu Authority for Advance Ruling has held that Input Tax Credit on GST paid for land survey charges incurred for purchasing alternate land to be surrendered to the Forest Department for afforestation purposes is not admissible, even though the afforestation obligation arises from the applicant’s continued use of forest land for its golf course business. The ruling by Members R.V. Pradhamesh Bhanu and B. Suseel Kumar in TN/ARA/2026 (M/s Ootacamund Gymkhana Club, decided 04.08.2026) denied ITC on three independent grounds.
First, the alternate land purchased and surrendered to the Forest Department does not represent a separately identifiable business asset, does not generate independent economic benefits, and is not in the applicant’s possession — it therefore fails the test of being ‘used or intended to be used in the course or furtherance of business’ under Section 16(1). Second, the survey charges related to the golf course land constitute services received for construction of an immovable property (the golf course involving earthwork, fairway shaping, turf laying, drainage systems) on the applicant’s own account, attracting the blocked credit under Section 17(5)(d). Third, since the alternate land is surrendered and written off in the books, the survey charges related to it are blocked under Section 17(5)(h) (goods/services written off). The AAR additionally noted that transactions relating to land are listed in Schedule III as activities neither supply of goods nor services, and any input service related to land would consequently not be eligible for ITC.
- 2026-juristway.com-2523-AAR(Tamilnadu)-GST | AAR Tamil Nadu | TN/ARA/2026 | 04.08.2026