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ITC eligibility

Mohit lodhi (student) (952 Points)

15 January 2019

can we take the ITC on borewell expenses..?

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Dhiraj Wadhwani (53 Points)
Replied 15 January 2019

if the supplier is registered and is ready to give the credit(upload the invoice in his gstr -1), then you can take it otherwise write it off as an expense.

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Prajwal Shetty (Artical Assistent) (237 Points)
Replied 15 January 2019

As per me, Since construction of Borewell is not covered under plant & machinery definition , so it is covered under immovable property and the expenses on construction is capitalized in books of accounts. Therefore the ITC on same is blocked u/s 17(5). Unless it is used in further outward supply.

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Mohit lodhi (student) (952 Points)
Replied 15 January 2019

yes, that was i am asking for....
Why is not covered under machinery..?

Vinod Babu (24191 Points)
Replied 15 January 2019

Is borewell is done for business purpose?

Mohit lodhi (student) (952 Points)
Replied 15 January 2019

yes, only for business purpose

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Vinod Babu (24191 Points)
Replied 15 January 2019

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.

Explanation. — For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;”

2. Above referred Explanation clearly provides, amongst other things, that ITC of GST on repairs to immovable property shall be restricted only if such repairs are capitalized. In other words if the repairs are treated as revenue expense in the books of accounts, the ITC in respect of the same can be claimed.

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pritesh (CA Final student) (7101 Points)
Replied 15 January 2019

Good question mohit sir👍👍

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 15 January 2019

Dear Mohit

As per Section 17(5) :
If the borewell expenses is capitalised to Building account then no... you cannot claim ITC , yes if it's being book as revenue nature (ie repair & maintenance) , then yes you can claim ITC .

Note : Above Expense is done by persons On Rent , can claim ITC on same ,as it will be never capitalised to Building account

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