RESTRICTION ON INPUT TAX CREDIT TO DEVELOPERS

[YUWRAJ KOTHARI]

IN CASE OF DEVELOPERS TAKEN FULL CREDIT OF ITC BUT SUPPLY/ SALES EFFECTED 50% ONLY AND THERE IS NO BALANCE IN INPUT CREDIT LEDGER.NOW OBTAIN OCCUPATION CERTIFICATE (O.C) THUS NOT REQUIRED TO PAY GST. WHETHER AMOUNTS TO EXEMPT SUPPLY POST O.C ??? AND THUS REQUIRE TO REVERSE PROPORTIONATE ITC TAKEN (REFER SEC 17(3))

ALSO WHETHER MEANING THAT CAN BE DEEMED INPUT AFTER OBTAINING O.C SHALL BE RESTRICTED SHOULD BE APPLIED???

AI Summary

Restriction on input tax credit: developers must reverse proportionate ITC where entire consideration was not received post occupation certificate.
Where a developer claimed full input tax credit but did not receive the entire consideration after issuance of the occupation certificate, the exemption tied to receipt of the entire consideration post O.C. is inapplicable. Developers who received advances or consideration before O.C. are taxable and must reverse proportionate ITC attributable to supplies not meeting the post O.C. entire consideration condition, while units not booked or paid for before O.C. may remain exempt and require corresponding ITC adjustments.