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Can I get Input Tax credit of Shed used to protect machinery from water

Aman Agrawal (....) (101 Points)

02 August 2021

We are making a Steel/Iron Shed for our factory to avoid water/direct sunlight to machine.. we are installing shed just for protection of machine and rawmaterial..

Am I eligible to take GST itc on goods used in preparing Shed ? Like iron sheet iron pipes .?

Note: I am also taking ITC on machines purchased this month

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13 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 02 August 2021

Yes ITC can be claimed

prasad Nilugal (3909 Points)
Replied 02 August 2021

If you are using construction materials like cement , iron , steel then as per section 17(5)(d) of the CGST act 2017 , it's block credit , you can not take input tax credit . please confirm with others also .

Aman Agrawal (....) (101 Points)
Replied 02 August 2021

No I only want to take credit of IRON pipes and sheets used in sheds. I am not using cement . It is totally movable. Please be clarify

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 02 August 2021

I think ITC can be claimed

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 02 August 2021

Aman, ITC can be said to be eligible. As it is movable, does not damage due to removal, etc.

But department would dispute. As values could be high, suggest to obtain a written legal opinion having clarity on the following:

1. what is immovable property with supporting case laws

2. what is plant & machinery and eligibility of structures created for P&M - case laws available in favour and against

3. Documentation to be kept ready in case of dept. issue (if credit being claimed)

1 Like

Imthias ahamed Kormath (910 Points)
Replied 02 August 2021

If it is coming under plant&mechiner item ,u may take itc,but this items used from ur stock,itc may be block at that proportionate value of goods purchased.

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Aman Agrawal (....) (101 Points)
Replied 02 August 2021

@ imthias Can you please clarify. I am installing shed to protect my machinery and raw material from damage due to water.. what is the issue in taking ITC.

Shed is for business purpose

I will take invoice.. seller will issue invoice and file the information in gstr1

Each and every requirement of GST law is followed.

Then what is the problem in taking ITC..

Aman Agrawal (....) (101 Points)
Replied 02 August 2021

My turnover is less than 1.5 crore . Does it matter

Imthias ahamed Kormath (910 Points)
Replied 03 August 2021

The Plant & Mechinery item to claim itc

. Air conditioners and electric fans.

Mains, service lines and switch gears.

Scaffolding and ladders.

Electrical transformers.

Telephone systems.

Safe deposit lockers.

Data-processing machines, computers and printers.

Tools and instruments.

Books containing technical know-how.

Bins and shelves in a factory.

Cylinders for storing gas.

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 03 August 2021

The restriction arises out of Section 17(5)(c)/(d) of CGST Act. Even if in relation to business construction activities is restricted. Also, how it is capitalised in the books of accounts - as building/civil structure or plant & machinery is important.