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ITC regarding query

Shahan (accountant) (202 Points)

21 January 2025

Dear Sir/ma'am

Can I claim itc on building materials.

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (7139 Points)
Replied 21 January 2025

As a trader of plants/trees, you can claim Input Tax Credit (ITC) on building materials, but only if they are used for:

1. *Business purposes*: The building materials must be used for constructing or renovating a building or structure for your business, such as a nursery, office, or storage facility.

2. *Furtherance of business*: The building materials must be used to further your business activities, such as creating a greenhouse or a storage area for plants.

Eligible Building Materials You can claim ITC on building materials like: 1. Cement 2. Steel 3. Bricks 4. Sand 5. Electrical fittings 6. Plumbing materials Conditions for Claiming ITC To claim ITC on building materials:

1. *Possess a valid tax invoice*: You must have a valid tax invoice from the supplier, containing the supplier's GSTIN, invoice number, date, and other required details.

2. *The goods must be used for business purposes*: The building materials must be used for your business activities, as mentioned earlier.

3. *File GSTR-3B and GSTR-2A*: You must file your GSTR-3B return and ensure that the supplier has filed their GSTR-1 return, which will reflect in your GSTR-2A.

Important Considerations 1. *ITC reversal*: If you use the building materials for personal purposes or sell the building, you may need to reverse the ITC claimed.

2. *GST rates*: Ensure you're aware of the GST rates applicable to the building materials you're purchasing. Consult a tax professional to ensure you're meeting all the conditions and complying with GST regulations.

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CA Akshay Poriya (job in industry) (329 Points)
Replied 22 January 2025

As per section 17(5) of cgst act 2017 Blocked credit under gst- ITC on buiding construction is not allowed whatever it is for business purpose or personal purpose whatever residential or commercial property when you capitalised in book of accounts. but when building material purchase for renovation or repairing purpose and charged as a expence (not capitalised) then, ITC allowed subjests to not for personal purpose and other condition of availing ITC fulfilled. also ITC allowed for further supply of same category of goods or services.so see the purpose of purchase of building material and treatment of in books of accounts and decide accordingly.