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ITC- GST Paid on O&M charges one time

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Kartheek Velamala

152 Points Posted on 12 July 2021

Dear Sir,

One of our client purchased a commercial building and entered into leased business. He paid GST to the builder on O&M Charges for maintaining the park.

And our client given that premises to lease and collect GST from his tenent on Rent and O&M.

Q: Shall my client avail ITC of GST paid on O&M charges to the Builder against what he collected from his tenent .

Replies (3)

Quick Summary

This discussion explores whether GST paid on Operational and Maintenance (O&M) charges for a commercial building can be claimed as Input Tax Credit (ITC). While Section 17(5) of the GST Act generally restricts ITC on services related to immovable property, a favourable Orissa High Court ruling in the Safari Retreats case offers a potential avenue. However, this ruling is currently under challenge in the Supreme Court, making professional advice crucial for navigating this complex issue.

CA Narendra Nimmala

Senior Manager

38 Points Posted on 12 July 2021

Operational and maintenance charges not being in the nature of works contract or immovable property, can be availed unless restricted elsewhere in Section 17(5).

CA Altamush Zafar

GST Consultant

15986 Points Posted on 12 July 2021

As such it is not allowed as per section 17(5). But there is a favourable judgement of Orissa High Court in the case of Safari Retreats. However the same has been challenged in Supreme Court.

Take professional opinion in this regard.