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

Input tax credit eligibility: ITC allowed for plant and machinery including integral foundations, but excluded for civil structures.
ITC is available for plant and machinery, including apparatus and machinery fixed by foundation or structural support used for making outward supplies; foundations and supports are treated as part of plant and machinery for ITC. Credit is excluded for land, buildings and other civil structures, telecommunication towers, and pipelines laid outside factory premises. Civil works that are integral to and capitalized as plant and machinery (such as foundations for boilers or chimneys) may be eligible for ITC, whereas standalone civil construction is not.