Query relating Blocked Credit U/s 17(5)
This query is : Resolved
09 August 2020
Dear All,
Please clarify the confusion through Illustration below :-
A company has given a contract of Rs, 9,60,00,000 (Excluding of gst @ 28%) to a civil contractor for construction of office Building
The company is engaged in manufacturing and supply of Taxable commodities as has branches through out the country.
"Now we know that under section 17(5) of cgst rule this type of input is ineligible for ITC against your taxable supply"
My question is if we consider the same, it is treated as Fixed Assets(Building) of the company therefore according to my valuation = Rs. 9,60,00,000 + Rs. 2, 68,80,000(GST)= Rs. 12,28,80,000 to be transfered to Building(Fixed Assets A/c)
now at the end of the year on what amount I will calculate Depreciation.......?
Whether, we need to calculate depreciation on the full amount inclusive of gst= Rs. 12,28,80,000/- as I have not availed the input......against taxable supplies.
Or, we need to calculate depreciation on the Amount (Exclusing GST)= Rs. 9,60,00,000/-........................?
Which one is correct.
Please clarify the confusion through Illustration below :-
A company has given a contract of Rs, 9,60,00,000 (Excluding of gst @ 28%) to a civil contractor for construction of office Building
The company is engaged in manufacturing and supply of Taxable commodities as has branches through out the country.
"Now we know that under section 17(5) of cgst rule this type of input is ineligible for ITC against your taxable supply"
My question is if we consider the same, it is treated as Fixed Assets(Building) of the company therefore according to my valuation = Rs. 9,60,00,000 + Rs. 2, 68,80,000(GST)= Rs. 12,28,80,000 to be transfered to Building(Fixed Assets A/c)
now at the end of the year on what amount I will calculate Depreciation.......?
Whether, we need to calculate depreciation on the full amount inclusive of gst= Rs. 12,28,80,000/- as I have not availed the input......against taxable supplies.
Or, we need to calculate depreciation on the Amount (Exclusing GST)= Rs. 9,60,00,000/-........................?
Which one is correct.
09 August 2020
You need to calculate depreciation on the full amount inclusive of gst= Rs. 12,28,80,000/- as you have not availed the input tax credit.
10 August 2020
Yes... correctly said....Full value including GST Should be considered for depreciation calculations
19 July 2025
Section 17(5)(d) of CGST Act:
Input tax credit shall not be available in respect of goods or services received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account.
So, yes — ITC on GST paid for office building construction is blocked.
Input tax credit shall not be available in respect of goods or services received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account.
So, yes — ITC on GST paid for office building construction is blocked.
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