ITC unavailable on cement, steel, architect-services used for Godown construction meant for commercial-renting

 

 

Important issues under Section 17(5)(d) of the CGST Act are raised by the matter of Suswani Foundations Private Limited, which is requesting an Advance Ruling in Tamilnadu over the availability of Input Tax Credit (ITC) under the GST for building godowns. This analysis delves into the details and implications of the ruling

Suswani Foundations Private Limited, the applicant, wants to build godowns for business use with the intention of renting them to registered dealers. They want to know if inputs used in the construction process qualify for ITC. The main thrust of their case is based on how they interpret Section 17(5)(d) of the CGST Act, which states that they should be able to claim ITC because the godowns are the source of their revenue. Nevertheless, the jurisdictional authorities assert that, in accordance with Section 17(5)(d), ITC is not accessible for inputs utilized, whether for further business purposes or not, in the construction of immovable property for one’s personal account.They emphasize that this includes all goods and services used in the establishment of such property, such as materials like cement, steel, and services provided by architects or consultants.

RULING

No Input Tax Credit is available on Inputs to the Applicant when the Godowns constructed by him is meant for renting it out for Commercial purposes to registered dealers.

 

 

The copy of the order is as under: