GST ITC on Commercial Property Purchase

Thanks for bringing up this important question, Ramesh.
As far as I know, ITC on the purchase of immovable property is generally not allowed under Section 17(5) of the CGST Act unless the property is used for further supply of works contract service. However, there may be exceptions based on the business model or structure. Speed Stars

Would love to hear from others if there have been recent clarifications or case-specific rulings!

Not allowed under section 17(5) of the CGST act 2017. The supporting notifictions can be found in this section of the act.

Not allowed under section 17(5) of the CGST act 2017. The supporting notifictions can be found in this section of the act.

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ITC of GST on the purchase of an immovable property is generally blocked under section 17(5)(d) of the CGST Act when the property is acquired for constructing a building or other civil structure, even if used for the taxable auto-ancillary business. The provision blocks credit on goods or services received for construction of immovable property on the taxpayer’s own account, except for plant and machinery. “Construction” includes reconstruction, renovation, additions or alterations to the extent capitalised.

The relevant authority is section 17(5)(d) of the CGST Act, rather than a separate notification. If the purchase is of a completed property and no construction-related GST is charged to you, there may be no input tax to claim; the sale of completed buildings is generally outside GST under Schedule III. Treatment can differ for qualifying plant and machinery or other specific facts, so the purchase deed, invoice and intended use should be checked.

For property acquisition, the GST review should distinguish the sale consideration from any separately invoiced construction or fit-out work. Manual ITC reviews can be difficult, and automation reduces repetitive checks while leaving eligibility and legal judgment in professional hands. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. WhatsApp us to explore how this can support your compliance workflow: https://wa.me/message/3HVOZ7HIY4ESC1