TaxTMI 
TaxTMI 
Land occupied by company. Company is going to construct factory over the land. Factory is for chemical business. In order to construct the factory over the land, first land is to be properly developed Contract is given for development of land. Contractor issues bill of works contract for development work over the land. Whether ITC is available or not?.
Land Development charges-eligible for ITC?
15 Jul 2018 
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Input tax credit eligibility on land development turns on classification as works contract services versus input for plant construction.
Eligibility for input tax credit on land development charges hinges on classification under the works contract exclusion: Section 17(5)(c) denies credit for works contract services supplied for construction of an immovable property other than plant and machinery, so if land development is part of such a works contract ITC is denied; if it is integral to construction of plant and machinery or provided by the same contractor as the factory construction, it may qualify as an input and attract ITC. Ambiguity in the definition of "plant" and classification risks dispute; obtain an advance ruling. (AI Summary)
Eligibility for input tax credit on land development charges hinges on classification under the works contract exclusion: Section 17(5)(c) denies credit for works contract services supplied for construction of an immovable property other than plant and machinery, so if land development is part of such a works contract ITC is denied; if it is integral to construction of plant and machinery or provided by the same contractor as the factory construction, it may qualify as an input and attract ITC. Ambiguity in the definition of "plant" and classification risks dispute; obtain an advance ruling. (AI Summary)