Utilize the ITC charged on purchases made in construction

[Jasbir Uppal]

My Dear experts. Need your help with the following query-

The assessee has construct immovable property and is not using for his own purpose but he is letting out the property for commercial use on which he is covered under the GST, can he entitled to utilize the ITC charged on purchases made in construction. In spite that Section 17(5)(d) of the Central Goods and Services Tax Act, 2017 treats input tax credit related to goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account as a ‘blocked credit’. In other words, input credit for the same is not available.

[Shilpi Jain]

Orissa HC decision allows credit in this case though this is pending before SC presently.

You could take and not utilise or reverse under protest until final verdict

[Himansu Sekhar]

As per Sec 17 the ITC is not available. Hon'ble High Court Odisha has not made the sec. Ultra vires.

[KASTURI SETHI]

I agree with Sh.Himansu Sekhar Ji. Until and unless the issue is decided by the Apex Court, the present law is in force and have have to be followed de jure.

[Jasbir Uppal]

Dear Sir/Madam,

Lots of thanks for given your valuable opinion on quarry

Yes you are right. In case the assess claim depreciation under Income Tax Act, 1961 @10% on written down value basis then how to possible for claimed Depreciation on the value of ITC claim on GST portal and no set off taken for the liability to pay. If issue is decided by the Apex Court against the assess

AI Summary

Input tax credit on construction of immovable property faces conflicting authority, leading to divergent compliance approaches pending final resolution. The statutory position classifies input tax on construction of immovable property for letting as blocked credit, precluding ITC. A conflicting high court decision permitted credit but appellate resolution is pending, producing divergent practitioner approaches-claiming credit then not utilising or reversing under protest versus adhering to the statutory bar. The forum also queried the interaction between GST ITC claims and income tax depreciation claimed on the same asset.