Work contract

This query is : Resolved

Guest

Guest (Querist)

10 September 2019 Sir / Madam

I would like to know whether contractor is eliglible to take credit of steel and cement in connection with contract provided to govt.
kindly answer at the earliest.

thank you
vimal kumar

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

(Expert)
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10 September 2019 ITC shall not be available for any work contract services. ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services.

For example, XYZ Contractors are constructing an immovable property. They cannot claim any ITC on the works contract. However, XYZ hires ABC Contractors for a portion of the works contract. XYZ can claim ITC on the GST charged by ABC Contractors.

Guest

Guest (Querist)

10 September 2019 Sir but immovable property is not owned by contractor, it is owned by govt.

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Guest

Guest (Querist)

10 September 2019 Sir here input ( cement and iron) is used for further use of contract

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

(Expert)
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11 September 2019 The ITC Credit is available only if you sub contract the part of the activity and that contractor charged GST in their invoice. The furtherance of business concept will not work here as specific provision is given

Guest

Guest (Querist)

11 September 2019 Ok
Sir thanks
Good day