we only construct buildings and other immovable properties at clien's site.
as it is works contract it is taxable at 18%
so can we claim itc on cement and iron purchased to provide services.....
if yes pls quote sections or rules....
thank u.
4 Replies
Hemal Makwana
(Designation)
(771 Points)
Replied 16 June 2020
As I understand, you are in the business of construction, ITC will be available. Please refer Section 17(5) pertaining to blocked credit, yours is not blocked credit
Shivam RC
(Student)
(23683 Points)
Replied 16 June 2020
You are in the Business of Construction ( Developer ). For you constructing Buildings is an Output Service. Cement and Iron is your inputs.
As per the Provision of Section 16(1) of the CGST Act 2017, Input Tax Credit ( ITC ) on Inputs, Input Services and Capital Goods used in the course of or furtherance of business can be claimed.
Therefore, As per my view, you can claim ITC on your inputs i.e. Cement, Sand, Iron etc.
For the Recipient ( Client ), it is a WORKS CONTRACT Service and the credit of same is specifically BLOCKED under Section 17(5) clause (c) of the CGST Act 2017.
Regards,
Shivam RC.
As per the Provision of Section 16(1) of the CGST Act 2017, Input Tax Credit ( ITC ) on Inputs, Input Services and Capital Goods used in the course of or furtherance of business can be claimed.
Therefore, As per my view, you can claim ITC on your inputs i.e. Cement, Sand, Iron etc.
For the Recipient ( Client ), it is a WORKS CONTRACT Service and the credit of same is specifically BLOCKED under Section 17(5) clause (c) of the CGST Act 2017.
Regards,
Shivam RC.
Pankaj Rawat
(GST Practitioner)
(55057 Points)
Replied 16 June 2020
Yes the ITC is available.
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
further supply of works contract service. For example
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
further supply of works contract service. For example
Pankaj Rawat
(GST Practitioner)
(55057 Points)
Replied 16 June 2020
If work Contractor supply his services to CA in respect of Construction of his Office , the work Contractor is allowed to claim ITC on his inward supply (As being further supplied) but CA is not allowed to avail ITC on Services avail by Contractor.
IN SHORT IN WORK CONTRACT THE ULTIMATE CUSTOMER IS NOT ALLOWED TO CLAIM iITC
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