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Input tax credit on factory shed material

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stapler

bus

231 Points Posted on 22 May 2019

Can a manufacturer take input tax credit of material like GC sheets, colour coated GP sheets, Angles, channels, pipes, paints etc. to be used in -

1. Repair of existing factory shed.

2. Construction of new factory shed.

If this is inadmissible, then does he need to first take the credit & then reverse in GSTR 3B?

Please guide.

Thanks in advance.

Replies (4)

Ritesh Asare

Practice

72 Points Posted on 22 May 2019

No. Its blocked credit.

You should capitallize GST along with the expenditure, and can claim depreciation.

No question of reversal of ITC afterwards.

Padmanathan Kv

1533 Points Posted on 22 May 2019

if you are treating repair as revenue expenditure you can claim ITC

ITC on Construction is blocked credit. Better to take the credit and reverse it in 3B

@ Padmanathan Sir, Replacing damaged GC sheets in an existing shed in factory is "Building Repairs" expense. That means it's correct to take the ITC in this case without the need to reverse it subsequently in 3B. Sir can you please cite relevant rule/notification, if any in support. Thanks for the guidance.