If any works contractor purchased cement, bricks, steel bars for completion of construction of a building for which he got contract from a Company then will the GST paid while purchasing those raw material be available as ITC or NOT? if not then how should he charge bill to company for the work and avoid double taxation because in GST law it is stated that there is no ITC AVAILABLE FOR WORKS CONTRACTORS
8 Replies
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 06 June 2018
💯 ITC is available to work contractor .
The company cannot avail ITC on your services
The company cannot avail ITC on your services
Vinod Babu
(24191 Points)
Replied 06 June 2018
As per section 17(5) (c) of the CGST Act, 2017, input tax credit shall not be available in respect of the works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service.
Thus, ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service. For example a building developer may engage services of a sub-contractor for certain portion of the whole work. The sub-contractor will charge GST in the tax invoice raised on the main contractor. The main contractor will be entitled to take ITC on the tax invoice raised by his sub-contractor as his output is works contract service. However if the main contractor provides works contract service (other than for plant and machinery) to a company say in the IT business, the ITC of GST paid on the invoice raised by the works contractor will not be available to the IT Company
Thus, ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service. For example a building developer may engage services of a sub-contractor for certain portion of the whole work. The sub-contractor will charge GST in the tax invoice raised on the main contractor. The main contractor will be entitled to take ITC on the tax invoice raised by his sub-contractor as his output is works contract service. However if the main contractor provides works contract service (other than for plant and machinery) to a company say in the IT business, the ITC of GST paid on the invoice raised by the works contractor will not be available to the IT Company
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 07 June 2018
Input tax credit not available (to Recepient) in respect of work contract services when supplied , means to end user (recepient)
Mohit Bhownani
(46 Points)
Replied 07 June 2018
If the work contract service is provided to the government , then ITC Allowed
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 08 June 2018
Yes,.. definately you can claim ITC
D RAMACHANDRAIAH
(Accounts asst)
(22 Points)
Replied 17 June 2019
If the work contract service is provided to the government , then ITC Allowed
Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=466379#reply
Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=466379#reply
If the work contract service is provided to the government , then ITC Allowed
Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=466379#reply
Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=466379#reply
If works contract service provided to SATISH DHAWAN SPACE CENTRE i.e CENTRAL GOVT
I WANT HSN CODE AND RATE
Recent Topics
- Clarity regarding Sec 16(4)
- GST ON HOTEL ROOMS details
- Relief for Delayed Filing of Tax Forms
- Expire stock
- INCOME TAX AY 25-26
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
Related Threads
CAclubindia
