Eligibility of input GST in cases where building is constructed for leasing purpose

[Amit Gopal]

Section 17(5) of the Central Goods and Services Act, 2017 provides that input tax credit in respect of the following shall not be available-

(c) works contract services when supplied for construction of immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including such goods or services or both are used in course of furtherance of business;

Query: In case, a builder is developing or constructing a building which would be used for providing on lease after construction. Whether builder would be eligible to take input tax credit of input GST paid on receipt of goods or services for construction of building?

AI Summary

Builders Can't Claim GST Credit for Leasing Construction Projects Under Section 17(5)(d) of the CGST Act 2017. A query was raised regarding the eligibility of input GST credit for builders constructing buildings intended for leasing. According to Section 17(5) of the Central Goods and Services Act, 2017, input tax credit is not available for works contract services or goods/services used in constructing immovable property, except for plant and machinery. A respondent confirmed that input tax credit would not be available for such construction projects intended for leasing, referencing Section 17(5)(d) of the Act.