ITC Real estate

[VishnuPriya R]

In case of sale of underconstruction commercial property, the GST rate is 12%. In such can ITC be availed for the construction of the particular commerical Property?.

Thanks in advance

[Sadanand Bulbule]

Dear querist

Plz refer Section 17[5][d] of the CGST Act and the ratio of Hon'ble Supreme Court's recent judgement in Safari Retreat Pvt Ltd case reported in 2024 (10) TMI 286.

[Ganeshan Kalyani]

I agree with the view of expert Sri Sadanand Bulbule Sir

[KASTURI SETHI]

A cue along with relevant case law  given by Sh.Sadanand Bulbule, Sir is more than sufficient. The query is too brief to reply in  a comprehensive manner. 

[Shilpi Jain]

Sale of underconstruction commercial property would be in the nature of a supply of a works contract service.

If that be so, then credit of the construction expenses can be claimed.

[Amit Agrawal]

I agree with Ms. Shilpi Mam!

Credit of the construction expenses can be claimed by the builder / contractor providing work contract services (& charging gst @12% thereon) by way of construction & sale of under-construction commercial property to the buyer. 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.

[Amit Agrawal]

And IF the querist is asking about availment of ITC at the end of buyer of such commercial property (subject query is not clear, at-least to my mind), then, one should take a note the following SC ruling:

Safari Retreat Pvt Ltd case reported in 2024 (10) TMI 286

These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.

AI Summary

Input Tax Credit Eligibility for Under-Construction Commercial Properties Under 12% GST Discussed; Section 17(5)(d) Referenced A query was raised regarding the availability of Input Tax Credit (ITC) for the construction of an under-construction commercial property, which is subject to a 12% GST rate. One respondent referred to Section 17(5)(d) of the CGST Act and a Supreme Court judgment in the Safari Retreat Pvt Ltd case. Another participant noted that the sale of such property is considered a works contract service, allowing credit for construction expenses. Several contributors agreed with this interpretation but emphasized that these views should not be taken as professional advice.