Construction of office in our factory

[Narendra Soni]

Sir, In our factory, contractors are engaged to construct office building.

1. If we purchase cement & iron from market and provide him for construction+he added bricks and tiles+moram+gitty etc and employed labour and construct the building.

2.If all the Material is supplied by us from market, he employed only labour.

3.We pay also to plumber,electrician,carpenter engaged in the construction of office building.

Kindly suggest-Type of service and GST applicable to us, and whether ITC will be eligible to us in above three cases separately..

[MUKUND THAKKAR]

NO ITC available for using for own in case of immovable property.

[KIRTIKUMAR PUROHIT]

No – Input Tax Credit cannot be claimed by the recipient of 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; [Section 17 (5) (c) of the CGST Act, 2017].

AI Summary

Input Tax Credit restrictions on immovable property construction limit credit for owner-supplied materials and contractor services. Availability of Input Tax Credit is restricted where works contract services are used for construction of an office as an immovable property; recipient-supplied materials or contractor-supplied labour for that construction do not entitle the recipient to claim credit, except where the input service is used as an input for further supply of works contract service.