TMI BlogInput tax credit on workX X X X Extracts X X X X X X X X Extracts X X X X ..... Sir Can contractors claim input tax on materials purchased for contruction of govt building? - Reply By Alkesh Jani - The Reply = Sir, As per section 17(5) (c) of the CGST Act, 2017 , input tax credit shall not be available in respect of the works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for further supply of works contract service. In my point of view ITC is not available, whether it is a Govt. Building or other immovable property. Thanks - Reply By KASTURI SETHI - The Reply = ITC is not available. - Reply By DR.MARIAPPAN GOVINDARAJAN - The Reply = I endorse the views of Shri Alkesh. - Reply By Himansu Sekhar - The Reply = I differ with the views of the Experts 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no bar for taking credit on the goods while providing the WCS. 2. The WCS received is not eligible for credit 3. Even under Sec 68 , , of FA 1994 , there was no bar of taking the credit on the inputs if no abatement was preferred. - Reply By Himansu Sekhar - The Reply = a correction at point no. 2 received by the service recepinet if he not the main contractor - Reply By Gan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eshan Kalyani - The Reply = With due respect to experts, my view is that for a contractor it is an input service to provide works contract service so input tax credit is eligible. - Reply By KASTURI SETHI - The Reply = .............. if contractor receives from sub-contractor. No other way out to avail ITC on material. - Reply By Himansu Sekhar - The Reply = Sir, kindly go through the minute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of 20th gst council meeting. Credit on materials is clarified there. In my view, there is no ground for denying the credit. Sec 17 has not put any bar also. - Reply By Alkesh Jani - The Reply = Sir, I am thankful to our experts for expressing their valuable views. In this regards, I wish to add that here as per the query raised, the querist seems to be main contractor, further, the openi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng lines of Section 17 (5) clearly mentions input tax credit shall not be available the definition of Input tax is given at Section 2 (62) of CGST Act, 2017 , which implies of goods and services and closing lines states that except where it is an input service for further supply of works contract service . Therefore, as the querist not providing further supply, ITC is not avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. As we know that ITC taken (although not utilized) will lead to litigation matters in future. I am also of the view that any decision of council or circular or any notification, shall not have over-riding effect over the law. In view of above, I stand still to the views expressed earlier. Thanks - Reply By Himansu Sekhar - The Reply = With humility I welcome the enriching discussions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the experts albeit have a different vide on the following grounds; Clause (c) of Sub sec. 5 of Sec 17 prohibits the works contract services to the recepient when such services are used for construction of immovable property except plant and machineries.\ Such exception is not applicable to the Service provider because the materials are used for providing the services. The gross value a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttracts the GST. - Reply By Ajay Sahi - The Reply = Thanks to all for valuable input. Still as a contractor supplying the works contract service for contruction of govt building even if its immovable, ITC on purchases of materials to be utilized for the contruction can be availed as its for the furtherance of the business... - Reply By MUKUND THAKKAR - The Reply = ITC available in case of W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CT is case of immovable property as per definition of works contract.2(119). (iv) Works contract services when supplied for construction of immovable property, other than plant and machinery, except where it is for further supply of works contract service; It is important to note that credit of GST paid on works contract services will be allowed only if the output is also works contract serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices. - Reply By Ganeshan Kalyani - The Reply = Here, the querist is a receipt of construction service or he himself providing the construction service is not clear. If he is recipient then obviously credit is not allowed. And if he is providing the service then also it is obvious that credit is allowed. - Input tax credit on work - Query Started By: - Ajay Sahi Dated:- 23-7-2018 Goods and Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices Tax - GST - Got 13 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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