Tax Management India. Com
                            Law and Practice: A Digital eBook ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals SMS News Articles Highlights
        Home        
 
Discussions Forum
Home Forum Goods and Services Tax - GST This
A Public Forum.
Anyone can participate to share knowledge.
We acknowledge the contributions of Experts/ Authors.

Submit new Issue / Query

← Previous Next →

Land Development charges-eligible for ITC?, Goods and Services Tax - GST

Issue Id: - 113951
Dated: 15-7-2018
By:- BHAVESH JHALAWADIA
Land Development charges-eligible for ITC?

  • Contents

Land occupied by company. Company is going to construct factory over the land. Factory is for chemical business. In order to construct the factory over the land, first land is to be properly developed Contract is given for development of land. Contractor issues bill of works contract for development work over the land. Whether ITC is available or not?.

Post Reply

Posts / Replies

Showing Replies 1 to 5 of 5 Records

1 Dated: 16-7-2018
By:- Rajagopalan Ranganathan

Sir,

According to Section 17 (5) (c) of CGST Act, 2017 " works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service."

If the contractor for development of the land and construction of the factory are same then the contractor can take credit of gst paid on development charges.


2 Dated: 16-7-2018
By:- Alkesh Jani

Sir,

I agree with the views of our experts.

Thanks


3 Dated: 16-7-2018
By:- KASTURI SETHI

Without the development of land, construction of plant .and installation of machinery is not possible.In my view, 'land development' is also part of Works Contract Service. Your activity is covered under the exclusion phrase, "Other than plant and machinery". In other words, ITC is denied on the contraction of an immovable property except plant and machinery. ITC is admissible from both aspects:-

(i) Credit is denied only on other than plant and machinery. ITC is admissible on construction of plant and installation of machinery.

(ii) Land development is an input service for same service i.e. Works Contract Service. Land development is very much basis of providing Works Contract Service.

What is the legal definition of a 'plant' ? What is classification of 'land development' ?" These have to be taken care of.

Remote possibility of litigation cannot be ruled out due to jugglery of words used in the exclusion clause.


4 Dated: 16-7-2018
By:- Rajagopalan Ranganathan

Sir,

In view of the opinions of the experts it is better to get an advance ruling on the question.


5 Dated: 17-7-2018
By:- KASTURI SETHI

I agree with Sh.Rangarajan Sir. I am sure you will win and thus save avoidable interest and penalty. The department can drag the activity of land development under the category of site preparation services. So be safe.


1

Post Reply

← Previous Next →
Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.