Itc on works contract service

A Builder or developer is taking works contract service for immovable property. Can he take the ITC of taxes paid on works contract services when the builder is making sales before OC is received from the government.

Also Section 17(5) states no ITC on works contract service is available if it is provided for construction of an immovable property.

 

Replies (3)
As per section 17(5) of the CGST act, ITC on work contracts is not available unless it is used for further supply of work contracts. In this case i am understanding that you will be making sale of an completed building structure. Therefore from this point of view you cannot claim ITC on the taxes paid.

But if you are an contractor and have sub-contracted some work of the work contract service and have paid gst, then you can claim the input.


What is OC and what is its significance?
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
Sir we take only govt contracts on roads, side culverts, small bridges, govt official buildings, etc.. now my doubt whether we are eligible ITC for taxes paid on material purchases (like cement, steel, bricks, bitumen, boulders,etc..)

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