work contract

No subcontracting- Since you are just purchasing materials such as cement, steel from other registered person, it does not fall in the definition of works contract as per section 2 (119) of CGST Act. Perhaps it could be concluded that you are not using subcontractor.


Further, if look at relevant portion of section 17(5)


[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;

Hence we can draw following outcomes
1. You can avail ITC if such materials are used for construction of plant and machinery irrespective of the fact that no subcontracting was done.

2. If used for other than P/M- cannot avail ITC , since it is falling under 17(5).

3. It is pertinent to mention that govt dept. may deduct TDS if the provisions of section 51 are applicable.

well thank you so much for suggestions , a lott of people registered under gst as a work contract service provider are claiming itc for the materials..... they r claiming it wrong...

The ITC can be avialed by the contractor, there is no restriction because the goods are used for the furtherence of business. It is exeption to the section 17(5).

The ITC can be utilized for the discharge of your output liability.

The restriction applies to only those the contractee only but not to the contractor.

 

 

 

still confused because look again there are variance in opinion.....

I AGREE WITH YASAM SIR.. MR. SHAILENDRA YES U CAN CLAIM ITC IF INPUT SERVICE FOR FURTHERNESS OF BUSINESS

in the section 17(5)(c), it never talks about goods, it talks about WC services