ITC eligibility
Mohit lodhi (student) (952 Points)
15 January 2019
can we take the ITC on borewell expenses..?
8 Replies
Dhiraj Wadhwani
(53 Points)
Replied 15 January 2019
if the supplier is registered and is ready to give the credit(upload the invoice in his gstr -1), then you can take it otherwise write it off as an expense.
Prajwal Shetty
(Artical Assistent)
(237 Points)
Replied 15 January 2019
As per me, Since construction of Borewell is not covered under plant & machinery definition , so it is covered under immovable property and the expenses on construction is capitalized in books of accounts. Therefore the ITC on same is blocked u/s 17(5). Unless it is used in further outward supply.
Mohit lodhi
(student)
(952 Points)
Replied 15 January 2019
yes, that was i am asking for....
Why is not covered under machinery..?
Why is not covered under machinery..?
Vinod Babu
(24196 Points)
Replied 15 January 2019
goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.
Explanation. — For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;”
2. Above referred Explanation clearly provides, amongst other things, that ITC of GST on repairs to immovable property shall be restricted only if such repairs are capitalized. In other words if the repairs are treated as revenue expense in the books of accounts, the ITC in respect of the same can be claimed.
Explanation. — For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;”
2. Above referred Explanation clearly provides, amongst other things, that ITC of GST on repairs to immovable property shall be restricted only if such repairs are capitalized. In other words if the repairs are treated as revenue expense in the books of accounts, the ITC in respect of the same can be claimed.
Pankaj Rawat
(GST Practitioner)
(55057 Points)
Replied 15 January 2019
Dear Mohit
As per Section 17(5) :
If the borewell expenses is capitalised to Building account then no... you cannot claim ITC , yes if it's being book as revenue nature (ie repair & maintenance) , then yes you can claim ITC .
Note : Above Expense is done by persons On Rent , can claim ITC on same ,as it will be never capitalised to Building account
As per Section 17(5) :
If the borewell expenses is capitalised to Building account then no... you cannot claim ITC , yes if it's being book as revenue nature (ie repair & maintenance) , then yes you can claim ITC .
Note : Above Expense is done by persons On Rent , can claim ITC on same ,as it will be never capitalised to Building account
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