Vat input credit

[chandrashekhar bathini]

Dear sir,

A company providing construction services in Telangana(construction of building ) and is paying wok contract tax @5% on 70% of the contract value

shall we take the input vat credit on purchases made(cement,steel,concrete mixer,consumable stores)against work contract tax.

[Ganeshan Kalyani]

Sir the credit is certainly not allowed. Department generally rejects the claim of input vat used in works contract service.

[YAGAY andSUN]

Dear Chandrashekhar,

Please check para 14 (i) of the appended link which enumerates that Any inputs used in construction or maintenance of any buildings including factory or office buildings, unless you are in the business of executing works contracts.

https://www.tgct.gov.in/tgportal/AllActs/APVAT/docs/Leaf/LEAF-1.pdf

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Construction Company Faces Input VAT Credit Restrictions on Cement and Steel; Check Para 14(i) for Guidelines. A company in Telangana providing construction services and paying a 5% work contract tax on 70% of the contract value inquired about claiming input VAT credit on purchases like cement and steel. One response indicated that credit is generally not allowed, as the department often rejects such claims for works contract services. Another response suggested reviewing specific guidelines, particularly para 14 (i), which restricts input credit for construction-related purchases unless the business is involved in executing works contracts.