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input tax credit

Yogesh Gupta (68 Points)

09 July 2018

what is the system of ITC on work contract service.

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prasad Nilugal (3909 Points)
Replied 09 July 2018

As per section 17 sub section 5(c) no ITC on works contract when supplied for construction of an Immoveable property .

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 09 July 2018

ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service. For example a building developer may engage services of a subcontractor for certain portion of the whole work. The subcontractor will charge GST in the tax invoice raised on the main contractor. The main contractor will be entitled to take ITC on the tax invoice raised by his sub-contractor as his output is works contract service. However if the main contractor provides works contract service (other than for plant and machinery) to a company say in the IT business, the ITC of GST paid on the invoice raised by the works contractor will not be available to the IT Company