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Eligibility to claim ITC

Akanksha Singh (Student ) (96 Points)

20 May 2018

Whether the taxable person supplying construction related services either as works contract or otherwise will be eligible to claim input tax credit on goods or services received by him?

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9 Replies

Vinod Babu (24196 Points)
Replied 20 May 2018

Yes, elible to claim input tax credit on goods.

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Akanksha Singh (Student ) (96 Points)
Replied 20 May 2018

Can you justify how?

Vinod Babu (24196 Points)
Replied 20 May 2018

In work contracts, we purchase all the raw materials for the construction or site work. In this purchases u can take input gst tax on them. After completion of work, you will raise a sales invoice as per the agreement or e-tender. gst 12% for government contract and 18% for private contract.

Akanksha Singh (Student ) (96 Points)
Replied 20 May 2018

I have this doubt because in Sec 17(5) it is clearly specified that ITC will not be allowed for works contract services related to construction of immovable property other than plant and machinery except for the sub contractor case.

I still had a doubt.

Vinod Babu (24196 Points)
Replied 20 May 2018

Yes for services ITC is not allowed but for goods ITC can be claimed.

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bhanu gupta (39 Points)
Replied 20 May 2018

No ITC will be available according to section 17 (5) of goods and service on works contract. only available to intermediate person ie., trader, middlemen

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 20 May 2018

Yes Work Contractor can take input on his Inward Supplies

Lets take Eg.

CA is building his office in that case the CA cant avail the ITC on work contract services, but at same time the work contractor who is providng services to CA is entitled take ITC in his Inward supplies.

Few more conditions

1.Work contractor providing services to Builder....
Worker contractor can avail ITC in his inward supplies, Builder can avail ITC on his inward supplies.

2. Worker contractor providing service to End customer. (whether registered or not)
Work contractor can take ITC in his inward supplies , but the customer cant.