Dear Sir,
I have doubt if we purchase a land and then do the full construction on it and after completion of full construction, we will rent out that building to another company...
My question can we eligible to take full itc on purchase of goods and services for this complete construction activities....
I also know that one similar case is still pending in ho'able supreme Court in case of safari retreats pvt Ltd vs orissa high court....
Note: we will use this building only rent out purpose and gst will be charged on renting income @ 18℅.
Note: Registry has been done in favor of company name only..
Thanks in advance
Best Regards
Harinder Kumar
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ITC on building construction goods and services
Replies (9)
Input tax on construction of building can be used only when used for the purpose of business
Even you use such building for renting purpose , no ITC will be available. ITC is specifically blocked u/s 17(5).
However you can fight for it in the hight court and appeal if any unfavourable order issued by the department.
However you can fight for it in the hight court and appeal if any unfavourable order issued by the department.
No it's not included in sec 17(5)
So where it is included..
As you said there is a favourable judgement by the Orissa HC in the case of safari retreats, however the same is still pending in the Supreme Court.
As such the law itself is not favorable.
Take a professional opinion on the same before either taking or lapsing ITC.
As such the law itself is not favorable.
Take a professional opinion on the same before either taking or lapsing ITC.
Claim ITC but don't utilise it. If s c decides in our favour , we will get it. I m doing this planning in my clients cases. lullakishor @ gmail.com
As a sir said u can claim it ITC first but do not untilize when ever once supreme court given judgement in favour of assesee then u can utilise the ITC in case judgment against assesee just u should reverse ITC
Without utilise ITC no interest leveid
Without utilise ITC no interest leveid
As per the Section 17 (5) of CGST Act ,the Input tax credit shall not be available on the goods and 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. Hence even if you have a taxable supply after the completion of Construction, You will not get the ITC on construction of an immovable property
See claiming ITC and not utilizing it for set off purposes is fine until decision of honorable SC comes. But the problem with this option is penalty under section 73 or 74 can be attracted by the department as under these actions penalty gets attracted even if ITC is only availed and not utilized.
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