Query relating Blocked Credit U/s 17(5)

This query is : Open

Abhishek Roy (Querist)
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09 August 2020 Dear All,

Please clarify the confusion through Illustration below :-

A company has given a contract of Rs, 9,60,00,000 (Excluding of gst @ 28%) to a civil contractor for construction of office Building

The company is engaged in manufacturing and supply of Taxable commodities as has branches through out the country.

"Now we know that under section 17(5) of cgst rule this type of input is ineligible for ITC against your taxable supply"

My question is if we consider the same, it is treated as Fixed Assets(Building) of the company therefore according to my valuation = Rs. 9,60,00,000 + Rs. 2, 68,80,000(GST)= Rs. 12,28,80,000 to be transfered to Building(Fixed Assets A/c)

now at the end of the year on what amount I will calculate Depreciation.......?
Whether, we need to calculate depreciation on the full amount inclusive of gst= Rs. 12,28,80,000/- as I have not availed the input......against taxable supplies.

Or, we need to calculate depreciation on the Amount (Exclusing GST)= Rs. 9,60,00,000/-........................?

Which one is correct.

Lekhraj sood

Lekhraj sood (Expert)
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09 August 2020 You need to calculate depreciation on the full amount inclusive of gst= Rs. 12,28,80,000/- as you have not availed the input tax credit.