Works contract

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This query is : Resolved

RameezM.Muhammed (Querist)

08 November 2017 For. Eg: i am a works contractor I have a liability of rs .50000 (25 25) for the month of oct but i have itc of rs.60000 (30 30) can I set the liability using itc?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 November 2017 Yes you can set the liability using ITC.

RameezM.Muhammed

RameezM.Muhammed (Querist)

08 November 2017 Sir can I maintain the refund for works contract case?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

03 August 2025 Regarding your query on setting off liability with ITC in works contract and refund:

Can ITC be set off against liability?
Yes, if you are registered under GST and the works contract service is eligible for Input Tax Credit (ITC), you can use the available ITC to offset your output tax liability. So if your liability is Rs. 50,000 and you have ITC of Rs. 60,000, you can adjust the liability fully against your ITC balance.

Can you claim refund for excess ITC in works contract cases?

Generally, if your ITC exceeds the output tax liability, you can carry forward the excess ITC to the next tax period.

Refund of ITC is available in certain cases under GST law (like zero-rated supplies, export of goods/services, etc.), but works contract services supplied domestically do not usually qualify for direct refund of ITC unless under specific conditions.

Summary:

ITC can be used to pay your tax liability.

Excess ITC can be carried forward.

Refund is generally not available unless specific conditions are met.

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