Gst on civil contruction

This query is : Resolved

prachee (Querist)
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05 July 2019 Dear Expert,

we are making a shed where our final goods will be manufactured , upto to four feet it it will be RCC work and above that we will have structural steel work. Also we have made three separate contract for RCC... supply of steel structure .. erection of steel structure . The designing of shed also have one separate contract.

Can we avail credit on above four category ?

however i know we cannot take credit on RCC contract , but i am not able to conclude wether we can take credit on rest of three category or not?

Please help expert

CMA ALKESH PATEL

CMA ALKESH PATEL (Expert)
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05 July 2019 NO YOU CAN NOT AVAIL CREDIT...
Section 17(5)
(c) 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;

(d)Goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

The term “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

Further the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes— (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises

CMA ALKESH PATEL

CMA ALKESH PATEL (Expert)
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05 July 2019 HOWEVER CONSTRUCTION MEANING NOT ONLY RCC BUT ALSO ALL ABOVE MENTION SECTION.

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prachee

prachee (Querist)
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05 July 2019 Can't we take credit on the service of the architecture who designed that factory shed ?

CMA ALKESH PATEL

CMA ALKESH PATEL (Expert)
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05 July 2019 NO YOU CAN NOT TAKE CREDIT because architecture service is also part of construction service is MY OPINION
– “Construction” is defined under explanation to sec 17(5)(c) and (d) for the purpose of these provisions to include re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property.

– Therefore, for any work to qualify as construction, the cost of construction work must be capitalised in the books of accounts which is guided as per Ind AS 16- Property, Plant and Equipments issued by the Institute of Chartered Accountants of India and notified by the Ministry of Corporate Affairs (MCA).