TaxTMI 
TaxTMI 
One trust section 8 company is running nearly 10 schools. They also rented shops to the vendors. They are collecting GST on rental charges. The services rendered to the students are exempted from GST. They collect rent along with GST and paid the same to the department. The question here is as to whether the trust can avail input tax credit paid for the maintenance or other expenses for the rented buildings/
AVAILING OF INPUT TAX CREDIT
13 Dec 2023 
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Input tax credit eligibility: GST on expenses for taxable rentals is claimable unless costs are capitalised as immovable property.
Whether a Section 8 trust running schools that also makes taxable rentals can claim input tax credit on GST paid for maintenance and related expenses: GST on expenses used for a taxable outward supply is eligible for credit where inputs further the taxable activity. However, inputs forming part of construction, reconstruction, renovation, additions, alterations or repairs are blocked to the extent they are capitalised as immovable property in the accounts; if not capitalised and used for the taxable renting activity, ITC is available. (AI Summary)
Whether a Section 8 trust running schools that also makes taxable rentals can claim input tax credit on GST paid for maintenance and related expenses: GST on expenses used for a taxable outward supply is eligible for credit where inputs further the taxable activity. However, inputs forming part of construction, reconstruction, renovation, additions, alterations or repairs are blocked to the extent they are capitalised as immovable property in the accounts; if not capitalised and used for the taxable renting activity, ITC is available. (AI Summary)