Block credit - Works contract services use construction of an immovable property (except plant & machinery) [section 17(5)(c)]

ITC blocked on works contract services for immovable property under Section 17(5)(c) except plant and machinery cases

Input tax credit (ITC) on works contract services used for construction of immovable property is blocked under section 17(5)(c) of the CGST Act, except when such services relate to construction of plant and machinery or are input services for further works contract supply. 'Works contract' involves both goods and services and is treated as composite supply. Construction includes renovation and repairs capitalized in accounts. ITC is allowed only if the property is capitalized, immovable, and not plant or machinery. Plant and machinery exclude land, buildings, and certain structures outside factory premises. ITC denial applies when the contract is for immovable property other than plant and machinery, unless used for further works contract services. Capitalization in books is key to ITC eligibility. Examples clarify that ITC is available for works contracts on plant and machinery but blocked for civil structures or external pipelines.