Works Contract under GST

[Rizwan Ullah]

Sir,

As u are aware works contract under GST is simpler to the one in previous tax regime but still some doubts persists. We are reqistered manufacturing entity, we have upcoming project related to plant expansion which involves new power plant commissioning. We are asking parties to submit quotations for various activities related to plant erection. We need to build new boilers & chimney involving mechanical & civil work. We will be issuing works contract to various vendors.

Please let me know are we entitled to take ITC of 18 % GST charged by registered contractor under this new regime for the works related to plant & machinery. Kindly be specific in replying the query

AI Summary

Manufacturing entity seeks clarification on claiming Input Tax Credit under GST for plant expansion project costs. A registered manufacturing entity is seeking clarification on availing Input Tax Credit (ITC) under GST for a plant expansion project involving the erection of a new power plant, boilers, and chimney. The main query is whether ITC can be claimed on the 18% GST charged by contractors for works related to plant and machinery. Responses indicate that ITC is available for plant and machinery, including their structural supports, but not for civil structures like buildings. If civil works are integral to the construction of plant machinery and capitalized accordingly, ITC may be claimed.