Input tax credit

[Bharat Cholleti]

Dear sir,

Is there any requirement of prior intimation to the department under the Act to avail the Input tax credit in construction business, where in appellant paying GST @18% and taking the ITC paid on inputs. Department person is telling to issue SCN( tax+interest+penalty) that without prior intimation availed ITC. But to my knowledge there is no such prior intimation to the department of any business in availing the ITC, please advise, thanks in advance.

[Yash Shah]

Dear Sir,

Request more information on the actual nature of construction services undertaken, as under construction services as well, there are mutiple heads under which the rates of tax applicable is different.

But to mention, if it is falling under misc provisions (falling under no specific entry) which is part of Sr. No.3 - Entry (xii) of Notification No. 11/2017, which clearly mentions no condition as to be fulfilled for paying tax under that scenario, and hence no prior intimation required.

[Shilpi Jain]

In case of an ongoing project there was an option from 01.04.2019 to continue to pay tax @ 18% with the option of ITC. If this option was sought then an intimation in Annexure IV was required to be submitted by 10.05.2019.

In case this intimation is not submitted for an ongoing residential project, it is assumed that for receipts from 01.04.2019 GST @ 5% is liable with no option of ITC

[Bharat Cholleti]

Here works of Trust buildings of orphanage persons was started in 2018-19 and completed in mid 2019 he was not exercised his option for the new rate of tax to the jurisdiction officer since then he is paying 18%, by default it is @5% no ITC.

Thank you sir, got it.

[Bharat Cholleti]

Thank you madam shilpi ji.

AI Summary

Clarification on Input Tax Credit: No Prior Intimation Needed Except for Ongoing Projects as of April 1, 2019, Under GST. A participant in a discussion forum raised a query about the necessity of prior intimation to avail Input Tax Credit (ITC) in the construction business under the Goods and Services Tax (GST) framework. A department official suggested issuing a Show Cause Notice for availing ITC without prior intimation. Respondents clarified that no prior intimation is required under certain provisions, but for ongoing projects as of April 1, 2019, an intimation was needed to continue paying 18% GST with ITC. The original poster acknowledged understanding that without this intimation, a 5% GST rate applies without ITC.