In put tax paid on construction of Convention Halls

[Ravikumar Doddi]

Dear sir,

Our applicant has constructed a convention Hall and paid a ₹ 1 Cr of Input tax on Construction of shed and other Material which is form part of Immovable property, will they eligible for ITC and can it be adjustable to out put tax. Earlier I read about ITC on construction of Hall which is let out for commercial purpose. Kindly guide us.

[Himansu Sekhar]

No ITC will be available as prohibited under sec 17(5)

[KASTURI SETHI]

I agree with Sh.Himansu Sekhar Ji. The judgement referred by you has been challenged by the department.. So you are to go by the Act and not by the case law. If the department accepts any judgement, then it can be followed.

[Ganeshan Kalyani]

You may apply for advance ruling. The ruling passed on your application will bind on you. If you follow any other ruling to back your contention then that may fail. In Pre-GST regime, there was similar issues which concerned many was that free issue supplies given by the recipient of supply to the contractor to use those goods in the execution of the works contract service. There is no connection of that case to this query. But only to give an example that if a provision is there in the Act, it has a weightage and authority has to follow the same. That is to say, if section 17(5) restricts the credit claim of construction material and service, then that will be disallowed by the authority.

AI Summary

Input tax credit restriction for construction of immovable property may be blocked, seek an advance ruling to determine entitlement.
Input Tax Credit on materials and services used in constructing a convention hall that form part of immovable property is disallowed as blocked under section 17(5). Respondents note that judgments cited by the inquirer have been challenged by the department and recommend obtaining an advance ruling, which would bind the applicant and determine entitlement in the specific factual context.