ITC on Construction of Immovable property

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This discussion explores the reasons behind the GST Council's decision to block Input Tax Credit (ITC) on the construction of immovable property, such as buildings. This contrasts with the ability to claim ITC on plant and machinery. The query highlights concerns, particularly for affordable housing projects, where reduced GST rates coincide with disallowed ITC, leading to varied construction costs.

Umashankara HB

Umashankara HB (Querist)

16 February 2023 What is the intension of government or GST council for blocking ITC on construction expenses on immovable property(Building), where in the case of Plant and machinery the ITC can be claimed?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

16 February 2023 Because the rates are reduced, where ITC is not allowed, particularly for affordable housing projects.
There are different rates for construction, with ITC and without ITC.

Umashankara HB

Umashankara HB (Querist)

22 February 2023 I didn't get your answer, Can you please give reasons why ITC is blocked?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 February 2023 Refer:: https://taxguru.in/goods-and-service-tax/gst-input-tax-credit-construction-immovable-property.html

A case law :: https://taxguru.in/goods-and-service-tax/itc-admissible-construction-immovable-property-business.html

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