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ITC on repairs and maintenance building.

sachin vs (36 Points)

07 June 2018

can we take Input tax credit on repairs and maintenance work of company building....?

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11 Replies

Satyavir Rajput (40 Points)
Replied 07 June 2018

You can take ITC if not capitalise as per u/s 17(5)

prasad Nilugal ( GST Practitioner & Accounts ) (14165 Points)
Replied 07 June 2018

No , you can not take ITC on repairs and maintenance work of the company building as per the section 17 sub section 5 (d) of the CGST act 2017 .

Vinod Babu (24191 Points)
Replied 07 June 2018

ITC not available on goods and services received by taxable person on renovation ,alteration on immovable property not matter used in business other than plant and machinery you cant claim also if cost of interior capatalized towards cost of interior on your books of account refer section 17(5)(d) cgst

1 Like

sujayamallik (Student CA IPC / IPCC) (22 Points)
Replied 28 November 2018

can i take credit on rented building repair and maintance

CA Nilesh Kumar Tyagi (Self Occupied) (49 Points)
Replied 28 December 2018

yes you can, to the extent not capitalised as per section 17(5). mean if it is charged to P&l then ypu can take the input.

Relevant Portion of Section 17(5) of CGST Act 2017 :-

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

……

(c)

works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d)		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 Like

CA Roopa Nayak (Specialized in Indirect Taxes) (6166 Points)
Replied 28 December 2018

Yes such credit can be availed to extent it is used in course of business of making taxable supplies+not capitalised as immoveable property ie when the expense is written off to revenue/P&L A/c

Specific restriction is there to avail such credit when it is capitalised to immoveable property

1 Like

Sandeep Verma (Chartered Accountant) (36 Points)
Replied 19 March 2019

Once we have established clear answers to the above 5 questions, decision with regards to the eligibility of credit can be taken. In view of the above discussion and legal text following factors would emerge.

Sr No	Type of Transaction				Credit Eligibility
Sr No	Type of Inward Supply	Type of Property	Use of the property	Capital Expense OR Revenue Expense	Credit Eligibility
1	Works Contract	Immovable Property	Own Use	Capital	No
2	Works Contract	Immovable Property	Own Use	Revenue	Yes
3	Works Contract	Immovable Property	For Further Supply in course of business	Revenue	Yes
4	Goods or Service purchased	Immovable Property	Own Use	Capital	No
5	Goods or Service purchased	Immovable Property	Own Use	Revenue	Yes
6	Goods or Service purchased	Immovable Property	For Further Supply in course of business (where immovable property itself is being supplied)	Revenue	Yes
7	Goods or Service purchased	Plant & Machinery	Own Use	Capital	Yes
8	Works Contract	Plant & Machinery	Own Use	Revenue	Yes

Jitendra (Asst.Manager Accounts) (26 Points)
Replied 11 August 2019

Hello Sandeep, I have read your detailed explanation as well as section 17(5). I have one query regarding ITC on repairs and maintenance of factory building. As one of my client has regular repair and maintenance of his factory building and all such expenses are charged to p&l a/c then he can avail ITC or not? As per your explanation he can take ITC on it but please read it carefully and explain the same "goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including such goods or services or both are used in course of furtherance of business;"

Jitendra (Asst.Manager Accounts) (26 Points)
Replied 12 August 2019

I have read your detailed explanation as well as section 17(5). I have one query regarding ITC on repairs and maintenance of factory building. As one of my client has regular repair and maintenance of his factory building and all such expenses are charged to p&l a/c then he can avail ITC or not? As per your explanation he can take ITC on it but please read it carefully and explain the same "goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including such goods or services or both are used in course of furtherance of business;"

Neethi V. Kannanth (.) (19015 Points)
Replied 29 January 2021

ITC can be availed to the extent such expenditure on repairs and maintenance is not capitalized.

prasanta puntia (2 Points)
Replied 12 January 2024

I have purchased some cement and rod for my factory repairs and maintenance.can I avail ITC or not?I have shown it as expenses in profit and loss account not capitalized.

Kindly suggest me.....