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.

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.