Silver lining for works contract service providers – ITC eligibility on office construction
Article 83: “Silver lining for works contract service providers – ITC eligibility on office construction”
The widely propagated idea of seamless flow of Input Tax Credit (‘ITC’) under Goods and Service Tax (‘GST’) has been diluted with insertion of Section 17(5)(c) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’), which restricts ITC on works contract services supplied for construction of immovable property. Such restriction is not applicable when works contract services are used as an input service for further supply of works contract services. This relaxation on input works contract services is the silver lining of the ITC restriction under Section 17(5)(c). Interestingly, the benefit of this relaxation has been missed which would have led to significant tax savings for the works contract service providers.
Through this article, Our Partner, Mr. Deepak Suneja, and Associate, Mr. Mohit Pugalia have attempted to analyze the availability of ITC of various works contract services availed by a taxpayer service and the implication of Section 17(5)(c) of the CGST Act on such transaction.
Please click on the below link to read our latest article titled “Silver lining for works contract service providers – ITC eligibility on office construction“ on the issue.