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ITC - CONSTRUCTION WORK

Fareed (Accountant) (90 Points)

23 November 2021

DEAR EXPERTS,

AUTO COMPONENTS MANUFACTURING INDUSTRY, AVAILED ITC OF CONSTRUCTION WORK.

CONSTRUCTION WORK ITC IS IT ELIGIBLE..?

IF NOT WHAT ARE THINGS TO BE DONE.

PLEASE SUGGEST

THANKS & REGARDS

FAREED

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7 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 23 November 2021

As per section 17(5) of the CGST act 2017 , ITC on Construction work is blocked credit not available , So you have to reverse Input Tax credit with interest applicable .

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Fareed (Accountant) (90 Points)
Replied 23 November 2021

Thanks for guidance...Mr.Prasad Nilugal

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 23 November 2021

Well come

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 23 November 2021

ITC on construction is blocked if it is in the nature of capital expenditure.

Fareed (Accountant) (90 Points)
Replied 24 November 2021

Thanks for guidance...! Mr.Zafar

Thanks for guidance...Mr.Prasad Nilugal

Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=583382

Thanks for guidance...Mr.Prasad Nilugal

Read more at: https://www.caclubindia.com/forum/itc-construction-work-583382.asp

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CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 24 November 2021

Cannot directly say ineligible. If I capitalise construction activity which is specifically designed and implemented for Plant & Machinery it gets capitalised to P&M. Such construction is clearly eligible.

Where it is general construction above comments hold good. Although, to the extent of pure construction credit is ineligible, any furniture and fittings, equipments, P&M which are capitalised separately - credit can be claimed if vendor agreements, accounting is clear.