ITC on construction of warehouse
This query is : Resolved
Quick Summary
21 August 2025
Hi ,
Can we claim ITC on Construction of warehouse such as cement, steel and other materials? after the construction is completed warehouse will be let out for Rent and GST will be collected on the same.
Considering the supreme court decision on Safari Retreat case whether ITC is eligble to claim and set off against future tax liability on rent collected from warehouse let out
Can we claim ITC on Construction of warehouse such as cement, steel and other materials? after the construction is completed warehouse will be let out for Rent and GST will be collected on the same.
Considering the supreme court decision on Safari Retreat case whether ITC is eligble to claim and set off against future tax liability on rent collected from warehouse let out
21 August 2025
If you construct a warehouse for letting out, collect GST on rental, and the warehouse is used specifically for that taxable rental supply, ITC on inputs (cement, steel, etc.) is eligible to be claimed and set off against future GST liabilities on rent collected.
If the warehouse construction is for own use or expenses are fully capitalized for purposes not directly linked to taxable supply, ITC may be restricted per Section 17(5)(d).
If there’s any ambiguity about “immovable property” vs “plant and machinery,” refer to the Supreme Court's principle and ensure your documentation backs up the business use for taxable rent.
In conclusion, based on Supreme Court judgment and current legal interpretations, ITC is eligible for warehouses constructed to be let out with GST rental supplied, subject to correct documentation and primary business use for taxable output. If denied by tax authorities, strong grounds exist to contest it, per Safari Retreats precedent.
If the warehouse construction is for own use or expenses are fully capitalized for purposes not directly linked to taxable supply, ITC may be restricted per Section 17(5)(d).
If there’s any ambiguity about “immovable property” vs “plant and machinery,” refer to the Supreme Court's principle and ensure your documentation backs up the business use for taxable rent.
In conclusion, based on Supreme Court judgment and current legal interpretations, ITC is eligible for warehouses constructed to be let out with GST rental supplied, subject to correct documentation and primary business use for taxable output. If denied by tax authorities, strong grounds exist to contest it, per Safari Retreats precedent.
22 September 2025
Good luck..
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Consultancy- Non DTAA
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Depreciation of fixed assets- coop housing society in mumbai
- Eway bill generation from place other than registeted
- Query – TDS on purchase of land from NRI under Income-tax Act, 2025
- DIN reactivation
- Condonation . E-Verification of last year return .
- GST rate and HSN code for sale of racing horses
- Management System (IMS)
- TDS Return Q1 FY 2026-27
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
