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

Input tax credit option requires prior intimation; absence converts supplies to reduced rate without ITC. Availability of Input Tax Credit depends on the taxation route chosen: miscellaneous construction entries allowing tax payment with ITC require no prior intimation; however, ongoing residential projects that wished to continue paying tax with ITC had to submit a prescribed annexure within the transitional window-failure to submit converts receipts to the reduced tax route without entitlement to ITC, exposing a supplier who claimed ITC without the required intimation to departmental challenge.