ITC on Factory building, Goods and Services Tax - GST

[Venkatesh Dhongadi]

Respected experts,

My query is in relation to ITC u/s 17(5). One of my client is giving contract to build a factory. He is letting out this factory on monthly rent basis. I have 2 queries -

1) whether the contractor can claim ITC on inputs he purchased to build the factory? (Later the contractor will bill for the building construction).

2) Whether contractee i.e, my client will be eligible to claim ITC on what contractor has billed as he is going to let out the factory building on monthly rent basis?

Posts / Replies

[Sadanand Bulbule]

Dear Venkatesh

The matter related to your query stands well settled. Please peruse discussion ID No. 115652 dated 11/11/2019 for experts' views.

[Venkatesh Dhongadi]

Sir What about the contractor. Whether contractor can claim ITC?

[Sadanand Bulbule]

Dear Venkatesh

As long as the  supply of construction services fall under the definition of “ Works Contract”,the contractor is entitled for ITC. 

[Shilpi Jain]

Contractor can claim ITC.

Your client - take and wait for the decision of the SC. Can consider reversing under protest or not utilising also.