ITC of RCM paid on residential property w.e.f 18.7.22

[Nikhil Virkar]

Sir/ Madam, GST paid under RCM on residential flat by registered person w.e.f 18.7.22 and being in use by its employee, whether ITC is allowed to claim being a business expenditure? or will it be hit by provisions of Section 17 of CGST Act 2017

AI Summary

Debate Over ITC Eligibility for GST Under RCM on Employee Housing: Personal Use vs. Business Purpose Under Section 17(5) A discussion on a forum centered around whether Input Tax Credit (ITC) is allowable for Goods and Services Tax (GST) paid under the Reverse Charge Mechanism (RCM) for residential properties used by employees. One participant argued that such use is personal consumption, thus blocking ITC under Section 17(5) of the CGST Act. Another participant suggested that if the property serves business purposes, like a mini-office, ITC might be claimable, though this is contentious and risky. The debate also touched on changes in the law post-2019 and the complexities of interpreting Section 17(5) regarding employee use.