ITC on works contracts

[Guest]

Hi experts, i have some doubts regardind the works contracts of 1

1.repair and maintainces of restarunts,banquiet hall,captria,kichen can i take ITC or not

2.electrical items and fittings above like restarunts,captria etc can i takd itc or not

3.if they how to accounted for like value-100+gst-10=110 can u brief me experts

4.what about treatment of capital assets like above exmple thanks in advance

[ANITA BHADRA]

Dear Sir

as per Sec. 2(119) of CGST Act. “ Works Contract” means a contract for building, construction, fabrication ,completion, erection, installation , fitting out, improvement , modification, repair ,maintenance, renovation, alteration, or commissioning of any immovable property wherein transfer of property in goods ( whether as goods or in some other form) is involved in the execution of such contract .

input tax credit is not available to any taxable person who constructs on his own account even if it is for business use..

Thus , You can not take ITC for repairs & maintenance and electrical fittings etc

Regards

[Guest]

Mam I know the defination ,but u did not explain the treatment what was gave example above ,,how to show in boos of accouunts... i want more expected form your side mam thank you..

[KASTURI SETHI]

ITC is not admissible. I agree with Ms.Anita Bhadra, an expert. Repair & maintenance pertain to immovable property. Embedded into earth.

[Vamsi Krishna]

Sorry ,, there was a typing error in my previous message.. Ref the words in bold letters..

Works contract under GST is limited to contracts to do with Immovable property. (ref sec.2(119) where it is clearly defined).

Sec.17(5) of CGST act mentions clearly that " works contract services when supplied for construction of immovable property is ineligible for credit except where it is for further supply of works contract services.

In your example the output services like restaurants, halls, cafeteria etc are not works contract services and therefore you are not entitled for credit on your repairs and maintenance, electrical works and related..

Pls refer definition of WCT 2(119) and Sec.17(5) for clear understanding.

AI Summary

Input tax credit on works contracts is ineligible for repair, maintenance and fittings on immovable property, requiring tax-inclusive accounting. Input tax credit is ineligible for repair, maintenance and electrical fitting services that amount to a works contract on immovable property; such costs should be accounted for inclusive of tax unless the services are further supplied as works contract services that qualify for credit.