ITC to Builders

[RAMESH SINGLA]

I have been looking for an answer as to whether section 17(5)(c) bars the credit when works contract service are supplied for construction of an immovable property. The language of the section apparently bars such ITC except when such works contract service is input service for further supply of works contract service. Therefore, it appears that the builders who are building or getting constructed buildings which are obviously, immovable properties, would not be eligible for ITC. I request the experts to read the section and then give the opinion. My view is that the ITC is not admissible to the builders in view of the language used in section 17(5)(c). However, most of the people in trade and also the Revenue officers feel that the ITC is admissible. I admit the policy of the govt. is to allow ITC but i feel the language of the section is not supporting the intention of the govt. The courts interpret on the basis of language used in the provision and not in terms of the policy of the govt. Pl give your views.

AI Summary

Debate on GST Section 17(5)(c): Can Builders Claim ITC on Works Contract Services for Immovable Properties? A discussion on a forum addresses whether Section 17(5)(c) of the GST law bars builders from claiming Input Tax Credit (ITC) on works contract services for constructing immovable properties. The original poster argues that the language of the section disallows ITC, despite the government's policy to permit it. A respondent concurs, stating that statutory language takes precedence in legal interpretation. Another participant requests further clarification on the section's wording, while a third suggests that ITC might be admissible if the construction services are provided to another customer, as subcontractor services are used.