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ITC on Construction of WAREHOUSE

13 July 2017

A company has constructed a Warehouse for renting purpose. GST is charged on the construction bill
i.e on materials and services used for construction.Can the company get ITC of GST on Construction bills.

Further can the warehouse be shown as additional place of business (but there is no office or work of the company). Solely for renting purpose.

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5 Replies

saurabh (jaipur) (257 Points)
Replied 13 July 2017

yes. company will get credit of ITC.
and the place is compulsory required to add in additional place.

abhishek banka (5 Points)
Replied 13 July 2017

can you refer the section or rules where it is written for ITC credit. As per my opinion sec 17 of CGST rules specifically disallow ITC on Construction

CA RAHUL BATRA (Working in International Firm ) (22 Points)
Replied 25 April 2018

Not Allowed for Construction of Immovable Property. Specifically mention in the ACT. Building cannot be treated as plant and machinery.

vikas pandey (CAFINAL) (93 Points)
Replied 02 July 2018

ITC will be available. Dear Rahul, you are right, ITC on constrution of Building is now allowed under section 17(5)(d) of CGST Act. But in the above query, constrution of Warehouse for renting purpose. Plant includes building or structureconstituted as apparatus/tool of the taxpayers by means of which business is carried on. But if the building/structure merely constitued a place where the business activity is carried on, can not be regarded as plant [ In CIT V. Dr. B Venkata Rao (2000) 111 taxman 629=247 ITR 268=2001 AIR SCW 2343 (SC 3 Member Bench)

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 02 July 2018

For the purposes of this Chapter and Chapter VI, the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes—

(i) land, building or any other civil structures;

(ii) telecommunication towers; and

(iii) pipelines laid outside the factory premises.

Thus it will not amount to construction of Plant & Machinery and hence no ITC is available.