TaxTMI 
TaxTMI 
Dear sir,
Rate of tax on painting contracts to apartments and buildings, is he eligible for ITC. As painting contracts involves labour. Section 8 of CGST Act says rate of tax should be applicable on principal supply. pl advise.
Rate of tax on Painting contract
20 Mar 2020 
7 Replies 
9494 Views Asked by
Input tax credit restriction on works contract: recipient's ITC depends on capitalization; supplier may claim input credits.
Painting contracts supplying paints and labour are treated as works contract services and taxed accordingly. Recipient ITC is disallowed under Section 17(5)(c) for works contracts related to construction of immovable property to the extent of capitalization, so painting of newly constructed apartments is excluded while non-capitalized repairs are eligible; the restriction applies to the recipient, whereas the painting contractor (supplier) may claim ITC on inputs and input services used to provide the service. (AI Summary)
Painting contracts supplying paints and labour are treated as works contract services and taxed accordingly. Recipient ITC is disallowed under Section 17(5)(c) for works contracts related to construction of immovable property to the extent of capitalization, so painting of newly constructed apartments is excluded while non-capitalized repairs are eligible; the restriction applies to the recipient, whereas the painting contractor (supplier) may claim ITC on inputs and input services used to provide the service. (AI Summary)