Input Tax Credit for Leasing if Commercial Property

[Guest]

I have lease out commercial office spaces on rent and I’m collection 18% gst on the same. Can you please let me know if I can claim input tax credit for this supply?

[KASTURI SETHI]

What is your taxable supply' ?

[YAGAY andSUN]

Yes, you can claim ITC on the tax paid on Maintenance of this commercial property.

[KASTURI SETHI]

I support the views of Ms.YAGAY and SUN, Sirs.

[Nitika Aggarwal]

Dear Sir,

As per Section 16 of CGST Act, 2017, every registered person is eligible to take the credit of tax charged on any supply of goods or services which are used or intended to be used in the course or furtherance of its business.

"Eligibility and conditions for taking input tax credit.

16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person."

Since, in your case, the person is engaged in the business of providing its commercial property on rent, thus it is squarely covered under the ambit of term business as defined under CGST Act, 2017 and accordingly eligible to take the credit of such input and input services which are used for the provision of aforesaid taxable services.

Thus, there is no bar in the law with regard to the services provided by your goodself in order to avail the ITC of goods or services which are used for the provision of taxable outward supply.

Regards

Nitika Aggarwal

9953157961

[DR.MARIAPPAN GOVINDARAJAN]

I endorsed the views of the experts.

AI Summary

Input tax credit for commercial leasing permitted when inputs and services are used in the course of the leasing business. Input tax credit can be claimed for goods and services used in providing taxable commercial leasing, because leasing commercial property is a business activity and, under Section 16 of the CGST Act, registered persons are entitled to credit tax paid on supplies used in the course or furtherance of their business; maintenance services related to the leased property are an example of such input services, with credit to be taken subject to prescribed conditions and by crediting the electronic credit ledger.