ITC on Construction of Warehouse

Suresh yadav (Student CA IPC / IPCC) (60 Points)

25 March 2019  

*FACT* :: An Open Commercial plot is co-owned by two individual person and they want to create LLP in which they will be partner.

They will give said plot to newly formed LLP on long term lease for 99 years on nominal rent. Business of LLP will be renting of warehouse which will be constructed on said plot.

The total construction cost will be paid by LLP.

There are two options available to construct warehouse, First option is to do self-construction by assigning local labours with all material to be purchase by LLP. Second option is to give contract to some builder (Regd. under GST) to construct the warehouse. In both the options, it will take at-least 6 months to one year to get warehouse constructed and ready for renting out the same.


*QUERY* :: Will LLP get GST ITC on consideration (expenses incurred) paid for constructing warehouse? If LLP gets GST ITC then it will utilise this ITC against subsequent GST Liability resulting from rent income earned from this new warehouse.


Dear experts please give your valuable opinion/remark to resolve my above mentioned query. This will also help readers to gain knowledge in field of GST.

Many Thanks.