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ITC on material issued to Contractor, Goods and Services Tax - GST

Issue Id: - 115310
Dated: 11-8-2019
ITC on material issued to Contractor

  • Contents

M/s ABC Hydro Ltd is engaged in the business of generation of Electricity. It has four hydro electric project in the state of Himachal Pradesh. The company has started construction of a new hydro electric project in the state of HP. The company has awarded a contract for construction of dam to M/s X Ltd. As per terms of contract M/s ABC (contractee) shall supply Cement and Steel to M/s X, (contractor) on recoverable basis to maintain quality . Accordingly M/s ABC Ltd purchased Cement and Steel from manufacturer with GST paid invoices and issued the materials (cement and steel) to M/s X by raising GST invoice. Whether M/s ABC can claim ITC? Will it not covered under Block credit under Sec 17(5)(d) as the inputs are used for works account for own use? May please clarify.

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Showing Replies 1 to 2 of 2 Records

1 Dated: 12-8-2019
By:- Ganeshan Kalyani

For this particular transaction M/a. ABC will considered as trading and thus becomes eligible for credit.

2 Dated: 12-8-2019
By:- Himansu Sekhar

ABC can take the credit. The supply of goods happened by ABC to x. It was also open for x to buy goods from market instead of abc. It is a separate transaction.


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