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Land Development charges-eligible for ITC?
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....and Development charges-eligible for ITC?<br> Query (Issue) Started By: - BHAVESH JHALAWADIA Dated:- 15-7-2018 Last Reply Date:- 17-7-2018 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Land occupied by company. Company is going to construct factory over the land. Factory is for chemical business. In order to construct the factory over the land, first land is to be properly developed Cont....
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....ract is given for development of land. Contractor issues bill of works contract for development work over the land. Whether ITC is available or not?. Reply By Rajagopalan Ranganathan: The Reply: Sir, According to Section 17 (5) (c) of CGST Act, 2017 " works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an inpu....
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....t service for further supply of works contract service." If the contractor for development of the land and construction of the factory are same then the contractor can take credit of gst paid on development charges. Reply By Alkesh Jani: The Reply: Sir, I agree with the views of our experts. Thanks Reply By KASTURI SETHI: The Reply: Without the development of land, construction of plan....
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....t .and installation of machinery is not possible.In my view, 'land development' is also part of Works Contract Service. Your activity is covered under the exclusion phrase, "Other than plant and machinery". In other words, ITC is denied on the contraction of an immovable property except plant and machinery. ITC is admissible from both aspects:- (i) Credit is denied only on othe....
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....r than plant and machinery. ITC is admissible on construction of plant and installation of machinery. (ii) Land development is an input service for same service i.e. Works Contract Service. Land development is very much basis of providing Works Contract Service. What is the legal definition of a 'plant' ? What is classification of 'land development' ?" These have to be take....
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....n care of. Remote possibility of litigation cannot be ruled out due to jugglery of words used in the exclusion clause. Reply By Rajagopalan Ranganathan: The Reply: Sir, In view of the opinions of the experts it is better to get an advance ruling on the question. Reply By KASTURI SETHI: The Reply: I agree with Sh.Rangarajan Sir. I am sure you will win and thus save avoidable interest and pen....
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....alty. The department can drag the activity of land development under the category of site preparation services. So be safe.<br> Discussion Forum - Knowledge Sharing ....