ITC ELIGIBILITY

[SAFETAB LIFESCIENCE]

Dear Experts,

WE are not clear about ITC eligibility to avail on the following items.

1. New investments made and Booked in Factory Building account such as Purchase of Steel, Cement, paint, Labor charges

2. New Investments made and Booked in Factory Building account such as Partition items like panel wall, aluminum walls, puffed panels

3. Repair expenses incurred and Booked in Building maintenance such as Purchase of Steel, Cement, paints, labour charges, partition items like puffed walls, aluminium walls partitions etc

[Shyam Naik]

GST on Goods and Services received for construction of immovable property, to the extent capitalized in books and accounts are ineligible ITC.

Accordingly, amount booked in Factory Building are ineligible credit.

So far Building Maintenance is concerned, it may be available. However, there are some adverse judgments by AAR.

[Atul Rathod]

ITC would be ineligible as the same would be treated as construction on own account.

Further construction Includes repairs, renovation etc to the extent of capitalization. Therefore if the said expenses are capitalized - credit ineligible & if charged to P&L - credit eligible.

However It is advice to look at orrisa high court judgement if the quantum of credit is very huge. Though the transaction is not similar but principle laid down is the same.

[KASTURI SETHI]

Dear Querist,

You are advised to go by the CGST Act in your own interest. This judgement is most likely to be challenged by the Department in the Supreme Court. The appeal period for filing SLP by the Department is not yet over.

[Ganeshan Kalyani]

ITC is eligible for point no 3.

[MUKUND THAKKAR]

ITC is not eligible item mention by you.all items are covered as part of prefabricates building. it is restricted credit under sec 17(5).

AI Summary

Input tax credit eligibility: capitalised construction costs are ineligible, whereas P&L maintenance expenses may be claimable.
GST on goods and services used in construction of immovable property and capitalised in books is not eligible as Input Tax Credit; expenses capitalised as part of new construction, repairs or prefabricated building components are ineligible. Expenses charged to profit-and-loss as building maintenance are generally eligible for ITC, although adverse precedents may exist and practitioners recommend reviewing relevant rulings before claiming significant credit.