Sunil (CA) 16 June 2017
A builder / developer is employing various contractors for construction of immovable properties (falt/villa). As per section 17(5) of CGST Act, input credit is not available on works contract service when supplied for construction of an immovable property, except where it is an input service for further supply of works contract service.
Can the services on Construction of building, complex etc can be avail input credit on Work contract service? The rate of works contract (18%) and construction of building complex etc (12% if land included) is different.
Is there any clarification given in this regard?
Can anyone advise on the above.
Sunil (CA) 07 July 2017
Sir, there is no answer for my above query. Also the article is based on the old rates in the article. The rate for construction service is fixed at 18% with a deduction of 1/3 of the total value towards land.
I feel the explanation to the section 17(5) clears that the same is unavailability of input credit will be applicable only in case the immovable property is capitalised.