Home GST No ITC for Expenses Beyond GST for Under-Construction Apartments/ Flats

No ITC for Expenses Beyond GST for Under-Construction Apartments/ Flats

0
No ITC for Expenses Beyond GST for Under-Construction Apartments/ Flats
Karnataka AAR's Order for Vinod Kumari Goyal

The bills excluding the products and companies tax levied by way of the builders that have been utilized for the sake of provide to the residences beneath the works contract service do not qualify to avail the ITC, Bangalore bench of Karnataka Authority for Advance Ruling (KAAR) dominated.

The petitioner Vinod Kumari Goyal was a proprietary reference registered below the provisions of the Central Items and Providers Tax Act (CGST),2017, and Karnataka Items and Providers Tax Act, 2017, and the proprietor of the land and has joined the joint improvement settlement (JDA) with Complete Surroundings Constructing Techniques Personal Restricted, Bengaluru for improvement of residential residences.

The applicant had sought an advance ruling to find out whether or not they have been entitled to say the enter tax credit score for bills, other than the tax charged by the developer for the supply of residences below development companies.

Representing the applicant, Chartered Accountant Sanjay Dhariwal argued that if a transaction was already topic to taxation by the developer, it shouldn’t be taxed once more when the applicant sells the condominium to the shopper. This could apply even when agreements have been made with clients earlier than the issuance of the Completion Certificates, which doesn’t contain the switch of property in items.

He additional contended that below the brand new scheme, the enter tax credit score was restricted to the developer and never prolonged to the landowner, making the applicant certified for availing credit score for the tax levied by way of the developer.

The Authority famous that the applicant was basically appearing as a supplier of works contract companies to potential condominium consumers, falling below Part 7(1) of the CGST Act and subsequently liable to pay tax as per Part 9(1) of the CGST Act.

The Authority additionally decided that enter tax credit score may solely be claimed for the tax charged by the developer for development companies, supplied all different circumstances have been met.

Learn Additionally: Listing of Items and Providers Not Eligible for Enter Tax Credit score

The 2-member bench, consisting of Ravi Prasad and Kiran Reddy, dominated that registered sellers on the time of provide of development companies or when the tax quantity payable by the applicant for the condominium provide exceeded the tax charged by the developer for development companies, have been eligible to say enter tax credit score. Nonetheless, they clarified that enter tax credit score couldn’t be claimed for some other bills other than the tax charged by the developer.

LEAVE A REPLY

Please enter your comment!
Please enter your name here