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work contact

uday (accountant) (28 Points)

03 January 2019

dear sir,

we can take ITC on work contact.

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4 Replies

CA S Praveen Kumar Reddy (Chartered Accountant) (2195 Points)
Replied 03 January 2019

yes u can claim ITC if u paid Tax for Business Purpose

pritesh (CA Final student) (7101 Points)
Replied 03 January 2019

As per section 17(5) of CGST Act, Input tax credit shall not be available in respect of works contract services availed by a person for constructing an immovable property (other than Plant and Machinery). ITC for works contract can be availed only by those who are in the same line of business and is using such services received for further supply of works contract service (e.g. ITC in respect of bill raised by sub-contractor is allowed to the main contractor). Plant and Machinery in certain cases, when affixed permanently to the earth, would constitute immovable property. Thus, where a works contract is for the construction of plant and machinery, the ITC of the tax paid to the works contractor would be available to the recipient.