Block ITC Under Section 17(5) for redesign of building:-

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1.       Matter:-   A Dealers who is operating an hotels and also running a restaurant in hotel wants to redesign his restaurant. He received invoices for consultancy or planning services for the same. Is the ITC on the invoices received from dealer is eligible or not?

 

2.       Block Credit Under GST :-   As per section 17(5) ITC on some services are restricted and works contract is also included in the same.

 

Section 17(5)(c) :-  “Works contract services when supplied for construction of immovable property, other than plant & machinery, except where it is an input service for further supply of works contract;”

Section 17(5)(d)  :-   “Goods or services received by a taxable person for construction of immovable property on his own account, other than plant & machinery, even when used in course or furtherance of business; “

Explanation :-   “For the purpose of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alteration or repairs, to the extent of capitalization, to the said immovable property.

 

Conclusion :-    If repairs and maintance done for immovable property and not capitalized in books is eligible for ITC under GST . No restriction under 17(5) for such transactions.

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