Input Tax Credit

[YUWRAJ KOTHARI]

In case of construction contractor doing labour job and charging 18% GST requires to purchase crane for material handling in high rise bldg,so also scaffolding material and hardware material like nails, bindingwire etc. Can he claim ITC on such input.Pl enlighten and Thanks in advance.

[Rajagopalan Ranganathan]

Sir,

According to Section 17 (5) (c) of CGST Act, 2017 input tax credit shall not be available in respect of works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service. Therefore you are not eligible to avail ITC on purchase of crane for material handling in high rise bldg,and also on scaffolding material and hardware material like nails, bindingwire etc.

AI Summary

Contractor Denied Input Tax Credit on Construction Purchases Under Section 17(5)(c) of CGST Act 2017 A construction contractor inquired about the eligibility to claim Input Tax Credit (ITC) on purchases such as a crane, scaffolding, and hardware materials under the Goods and Services Tax (GST) for labor jobs in high-rise buildings. The response clarified that, according to Section 17(5)(c) of the Central Goods and Services Tax (CGST) Act, 2017, ITC is not available for works contract services related to the construction of immovable property, except when these are used for further supply of works contract services. Thus, the contractor is not eligible for ITC on these purchases.