Input Credit in case of Works Contract

[Saurabh Singh]

Dear Team

I have one client who is doing Civil contract works , Following is the discription of his works:-

1. Civil Works with material

2. Paying  Tax on @ 5% on Invoice Value

3. Take Full Input Credit of Goods Purchased From Register Delar

Now My Querstion is :-

1. Can he take input credit

2. any notification is there for composit contract

Kindly help me with ur valuable reply and comment on the same

Thanks & Regards

saurabh Singh

09773679465

[MANDAVILLI RAMAKRISHNA]

from which state you are asking this question? your question is also not clear.

he can not take ITC if he opts to pay at 5% i.e., compositon rate.

 

he can take ITC in case of non composition ie., he has to be pay tax at 14.5%

after setting off ITC.as the works contract turnover does not fall in any schedule.

in andhra pradesh, 90% of input eligible to be claimed for set off.

composition to be opted in a month time of receiving work order

RK

VIZAG

AP

9000016080

AI Summary

Understanding Input Tax Credit Eligibility for Civil Contractors: Composition vs. Non-Composition Tax Rates and Rules A discussion on a forum involves an inquiry about input credit eligibility for a client engaged in civil contract works who pays a 5% tax on invoice value and claims full input credit on goods purchased from registered dealers. A respondent clarifies that input tax credit (ITC) cannot be claimed if the client opts for the 5% composition rate. However, ITC can be claimed if the client pays a 14.5% tax rate under non-composition terms, with specific rules applicable in Andhra Pradesh, including a 90% input eligibility for set-off and a one-month timeframe to opt for composition after receiving a work order.