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Eligible for ITC on factory Construction

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AMBER

Student

106 Points Posted on 27 January 2020

Sir
My Client is constructing factory building, the material used the construction like steel cement and other material are eligible for ITC ?

If it is eligible under under section or any circular

but as per my view u/s 17(5) ITC will not be availed
hence give me clarification on this
Thank You

Replies (5)

Quick Summary

This discussion clarifies whether Input Tax Credit (ITC) is eligible for materials used in factory construction. Generally, if construction costs are capitalised, ITC cannot be claimed as per Section 17(5) of the CGST Act. However, if expenses are shown in the Profit and Loss account, ITC might be claimable, though new constructions typically cannot be booked as revenue expenses in P&L.

Ranga raj

still studying

91 Points Posted on 27 January 2020

@ AMBER if your client is capitalising the expenses incurred in the construction, then he/she cannot claim ITC on such goods rather if they are showing those expenses in the p&l then they can claim ITC

Pankaj Rawat

GST Practitioner

29904 Points Posted on 28 January 2020

You yourself had mentioned the correct section , which states that ITC on same is block (If capitalised)

RAJA P M

"Do the Right Thing...!!!"

77833 Points Posted on 28 January 2020

@ Mr AMBER.,

The said section (17(5) of CGST Act) blocked the ITC. Also You have the details correctly. No more clarification for the ITC will not be avail.

@ Mr Ranga Raj.,
New construction can't be book as RM into PandL...