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ITC for work contractor

Shivraj Shintre (kolhapur) (175 Points)

07 July 2020

x provide work contract service to gov on which gst is charged @ 12% . For such purpose X purchase some material .in this case Whether X is eligible to take itc on material purchase or not?

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9 Replies

sabyasachi mukherjee (27574 Points)
Replied 07 July 2020

Is X REGISTERED UNDER WORKS CONTRACT TAX...

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KRISSHNAN KP (4215 Points)
Replied 07 July 2020

Yes he may claim ITC

sabyasachi mukherjee (27574 Points)
Replied 07 July 2020

There are several conditions for claiming itc credit:
1. registered under works contract act.
2. valid tax invoice.

sabyasachi mukherjee (27574 Points)
Replied 07 July 2020

There are several conditions for claiming itc credit:
1. registered under works contract act.
2. valid tax invoice.

Vijayprakash P (1313 Points)
Replied 07 July 2020

Section 17(5)(c)ofCGST Act says that ITC shall not be available in respect of the following namely" works contract service when supplied for construction of an immovable property (other than Plant and Machinery) except where it is an input service for futher supply of work contract service.

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chethan data (298 Points)
Replied 07 July 2020

Under works contract itc eligible for two circumstances
01 any input purchase for provision for outward supply
(similar business)
02 plant & machinery expect telecommuncation tower, civil structures, pipeline laid outside of factory

Shivam RC (Student) (23683 Points)
Replied 07 July 2020

You are a Works Contractor so for you materials purchased is an input and as per the Provision of Section 16(1) of the CGST Act 2017, ITC of inputs, input services and capital goods used in the "course of or furtherance of business" can be claimed.

Therefore you as a Works Contractor will be eligible to claim ITC on materials purchased provided that all the FOUR CONDITIONS as laid down under Section 16(2) of the CGST Act 2017 is fulfilled.

Section 17(5) of the CGST Act 2017 talks about that the credit of GST paid on availment of Works Contract Service in the hands of the Service Recipient will be "BLOCKED."

Regards,
Shivam RC.

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 08 July 2020

Yes agree with Mr. Shivam

@ Vijay Prakash , kindly read as quoted by you the extract from Section 17(5) " Except where it is an input Service for further supply"

So when it is further supply the ITC can be claimed.

1 Like