Input Tax Credit restriction under Section 17(5)(c) and 17(5)(d) will not apply to supplier of works contracts service.
Input tax credit— Section 17(5) of CGST Act— In the instant case, applicant is is a works contractor executing the works awarded by the Government of Andhra Pradesh, Panchayat Raj Department, Eluru Circle.
Questions raised before the Authority is as follows—
1. Whether the applicant is eligible for Input Tax Credit (ITC) in respect of the GST paid on goods and services used as inputs in execution of "Works Contracts" specifically in execution of Road work contracts to Government Engineering Departments.
2. If not, on which type of goods/ services the ITC is not eligible.
In the instance case, the applicant is the supplier of works contract services and the goods and services received by him for construction of immovable property (other than Plant or machinery) are neither owned nor capitalized in his own account, but passed on to the contractee. Hence even as per the provision of Section 17(5) (d), the applicant does not fall under this ineligible category. Thus the restriction contained under clause c & d of sub Section 17(5) is not applicable to the applicant in the given circumstances.
Held that— The applicant is eligible for Input Tax Credit (ITC) in respect of the GST paid on goods and services used as inputs in execution of "Works Contracts". Input Tax Credit restriction under Section 17(5)(c) and 17(5)(d) will not apply to the applicant as his output is works contracts service.
Input Tax Credit restriction under Section 17(5)(c) and 17(5)(d) will not apply to supplier of works contracts service.
Input tax credit— Section 17(5) of CGST Act— In the instant case, applicant is is a works contractor executing the works awarded by the Government of Andhra Pradesh, Panchayat Raj Department, Eluru Circle.
Questions raised before the Authority is as follows—
1. Whether the applicant is eligible for Input Tax Credit (ITC) in respect of the GST paid on goods and services used as inputs in execution of "Works Contracts" specifically in execution of Road work contracts to Government Engineering Departments.
2. If not, on which type of goods/ services the ITC is not eligible.
In the instance case, the applicant is the supplier of works contract services and the goods and services received by him for construction of immovable property (other than Plant or machinery) are neither owned nor capitalized in his own account, but passed on to the contractee. Hence even as per the provision of Section 17(5) (d), the applicant does not fall under this ineligible category. Thus the restriction contained under clause c & d of sub Section 17(5) is not applicable to the applicant in the given circumstances.
Held that— The applicant is eligible for Input Tax Credit (ITC) in respect of the GST paid on goods and services used as inputs in execution of "Works Contracts". Input Tax Credit restriction under Section 17(5)(c) and 17(5)(d) will not apply to the applicant as his output is works contracts service.