TaxTMI 
TaxTMI 
Sir,
We are constructing a Hospital complex. We directly purchase some goods and use in construction. Are we eligible for input tax credit.
INPUT TAX CREDIT FOR CONSTRUCTION OF HOSPITAL
24 Jul 2017 
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Input tax credit depends on whether hospital construction is a taxable works contract service or supports exempt healthcare services.
Availability of input tax credit for hospital construction depends on whether the construction constitutes a taxable works contract service-entitling ITC-or is for the owner's own use or leads to exempt health care services, in which case ITC is not admissible. The key inquiry is whether the activity is a taxable outward supply; if output is exempt (including certain hospital services or rent used for exempt services), inputs attributable to that exempt supply cannot attract ITC. (AI Summary)
Availability of input tax credit for hospital construction depends on whether the construction constitutes a taxable works contract service-entitling ITC-or is for the owner's own use or leads to exempt health care services, in which case ITC is not admissible. The key inquiry is whether the activity is a taxable outward supply; if output is exempt (including certain hospital services or rent used for exempt services), inputs attributable to that exempt supply cannot attract ITC. (AI Summary)