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GST on construction of road services provided to Govt.
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....ST on construction of road services provided to Govt.<br> Query (Issue) Started By: - SHARAD ANADA Dated:- 6-3-2019 Last Reply Date:- 22-3-2019 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Can a main contractor avail ITC on cement and other materials and capital goods used for construction of road , Dam, etc services provided to Govt. Or it's a block credit U/s 17(5)(c) of CGST Act ....
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....2017. Can sub contractor avail ITC on cement and other materials and capital goods used for construction of Road, Dam etc services provided to main contractor who in turn provide services to Govt. Or it's blocked credit u/s 17(5)(c) of cgst act 2017 Can main contractor avail ITC on bills raised by sub contractor? Same issue regarding commercial construction or residential construction to pr....
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....ivate builder? Reply By Pavan Mahulkar: The Reply: Input Tax Credit is blocked as per section 17(5)(c) (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; & As per section 17(5)(d) (d) goods or services or both received by a taxable person for cons....
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....truction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Further explanation is provided Explanation.--For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capita....
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....lisation, to the said immovable property; So, Principal Contractor can avail credit in terms of Works contact services availed from subcontractor as it is used for further supply of works contract service and not blocked u/s 17(5)(c) Principal Contractor or Subcontractor never used goods or services or both on own account Rather they use the same for transferring to employer/Principal contractor....
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.... Hence ITC not blocked u/s 17(5)(d) So in all the scenario mentioned by you either the WC services are provided to Government or for commercial or resedential construction ITC is available unless the said supply is exempted Reply By Pavan Mahulkar: The Reply: Further Principal contractor or subcSubcontra never capitalize the immovable property constructed As it has been constructed for employe....
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....r Hence 17(5)(d) Not applicable here and the ITC on inword supply of goods , services or both used in construction of immovable property By contractor or Subcontractor is available to them.. Reply By KASTURI SETHI: The Reply: Query-wise reply is as under:- 1. Yes. 2.Yes 3.Yes. 4.Yes. I also concur with both replies of Ms.Pavan Mahulkar. Regarding exemption care has to be taken of Notific....
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....ation No.11/17-CT(Rate) and 12/17-CT(Rate) as amended from time to time (last amended on 31.12.2018). In this scenario, no exemption has available for the services supplied to Govt. Regarding exemption, it is pertinent to go through the decision of AAR :- 2018 (19) G.S.T.L. 537 (A.A.R. - GST) = 2018 (11) TMI 1349 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN IN RE : KAILASH CHANDRA Reply By KASTURI ....
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....SETHI: The Reply: One will have to muster courage and confidence to avail ITC on the input/input services in providing Works Contract Service. Reply By KASTURI SETHI: The Reply: This decision of AAAR, Rajasthan is also relevant and helpful to arrive at some concrete conclusion. 2019 (3) TMI 1076 - APPELLATE AUTHORITY FOR ADVANCE RULING, RAJASTHAN IN RE: NAGAUR MUKUNDGARH HIGHWYS PVT. LTD., UDA....
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