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ITC on loan processing charges

Jeetu Kodwani (Consultant) (421 Points)

30 May 2020

dear experts,
M registered in GST as commercial property renting services provider.

I have purchased commercial property for let out purpose.
the property is purchased from bank loan and bank has charged GST on loan processing charges.

can I claim the ITC on loan processing charges against the GST payable on renting charges.??

thanks

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4 Replies

Tats Delhi (4 Points)
Replied 30 May 2020

Yes you can take the itc

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Himanshi Garg (Ca Article) (354 Points)
Replied 30 May 2020

It is not provided anywhere in the Act whether you can take ITC on Bank loan processing charges.
But the act specifies some case under Section 17(5) which are ineligible for ITC and Interest on bank loan processing charges is not given there.

Therefore you can take the ITC on the same, as taking loan for the purchase of Commercial property is essential to carry out your business.

Thanks

Jeetu Kodwani (Consultant) (421 Points)
Replied 30 May 2020

Thanks for your reply,
my thought behind this question is the loan is taken for immovable property and section 17(5) blocked credit for any goods or services related to immovable property.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 30 May 2020

But the immovable property is going to let out (rented) & rental Income from commercial property is taxable in GST.

So in term of Section 16 the ITC can be claimed as it is in course of business.

Note : For repair expenses on Account of Immovable property the ITC is available , So if the Loan processing charges is not capitalise to Immovable Property the ITC is available.