ITC Available On Works Contract to Kolkata Municipal Corp
The West Bengal Authority of Advance Ruling (AAR) ruled that the Input Tax Credit (ITC) is available on works contract service to Kolkata Municipal Corporation for the construction of the immovable property.
The applicant, Sital Kumar Poddar is supplying works contract service to Kolkata Municipal Corporation to construct buildings for various projects. The applicant sought the advance ruling on the issue whether he is eligible to claim the input tax credit on the inward supplies of the goods and services procured for supplying the works contract service.
Applicant submitted that the question has roots in the provisions of section 17(5) and (d) of the GST Act. The input tax credit shall not be available on works contract service 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 or on the goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.
The coram consisting of Sumitra Bhattacharya and Parthsarthi Dey held that the applicant is supplying works contract service to the Kolkata Municipal Corporation, therefore, making an outward supply of works contract service and is not prohibited from claiming input tax credit either under clause (c) or clause (d) of section 17(5) of the GST Act.