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Work constructor

20 August 2018

I am a govt works constructor...
.I purchese many material to buid building or road like cement,iron,stone.....and also paid gst.....so sir can I avail ITC for this case???

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9 Replies

Vinod Babu (24191 Points)
Replied 20 August 2018

Yes you can avail ITC.

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Anirban Sinha (CA in service) (727 Points)
Replied 20 August 2018

Yes itc can be availed.

MD HUSSAIN (195 Points)
Replied 20 August 2018

a building developer may engage services of a sub-contractor for certain portion of the whole work. The sub-contractor will charge GST in the tax invoice raised on the main contractor. The main contractor will be entitled to take ITC on the tax invoice raised by his sub-contractor as his output is works contract service. However if the main contractor provides works contract service (other than for plant and machinery) to a company say in the IT business, the ITC of GST paid on the invoice raised by the works contractor will not be available to the IT Company. Plant and Machinery in certain cases when affixed permanently to the earth would constitute immovable property. When a works contract is for the construction of plant and machinery, the ITC of the tax paid to the works contractor would be available to the recipient, whatever is the business of the recipient. This is because works contract in respect of plant and machinery comes within the exclusion clause of the negative list and ITC would be available when used in the course or furtherance of business...............I can't understand that...........plz sir explain easily ....

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 20 August 2018

As per section 17(5) itc is block in regard to immovable property , but 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 services .
And ITC is not block for Plant & machinery so if the work contract services in regard to P&M to IT company credit is available , but when the same is provided in regard to Immovable property the credit is not allowed as block as per section 17(5)

MD HUSSAIN (195 Points)
Replied 20 August 2018

pankaj sir ................I am a govt works constructor...
.I purchese many material to buid building or road like cement,iron,stone.....and also paid gst.....so sir can I avail ITC for this case???...........