Goods and Services Tax – GST – By: – Ganeshan Kalyani – Dated:- 13-2-2019 – Section 17 of Central Goods and Services Act, 2017, provides for apportionment of credit and blocked credits. Explanation to clause (c) and (d) of sub-section 5 of said section 17, states as the expression construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property. Clause (c) and (d) of the said section is reproduced below for the sake of discussion: (c) works contract services 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; (d) goods or services or bot
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ords, the GST paid on inward works contract services or goods or services received for the purpose of carrying out construction work including new construction or re-construction or renovation or additions / alternations or repair is eligible for credit, if they are not added to respective fixed assets block in the balance sheet of the books of accounts. They are instead debited to profit and loss account of the books of account. In the case of M/s. GGL Hotel and Resort Company Limited = 2019 (1) TMI 488 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL, the Authority for Advance Ruling, West Bengal has held that the Input Tax Credit is not eligible for the lease rent paid during pre-operative period for the leasehold land on which the resort is
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perty like a building is sold the profit is computed after deducting from the sale proceeds the cost of the property, including the land. The cost of constructing the immovable asset, therefore, includes the lease rental paid for right to use the land on which the asset is built. Being an integral part of the cost of the immovable property the lease rental paid for the service of right to use the land is a supply for construction of the said property. The Applicant will admittedly capitalize the lease premium [refer to the fixed assets schedule: Note 12 to the Balance Sheet as on 31/03/2018, the Application and the Applicant s written submission on rebuttal to the concerned officer s views]. The property is, therefore, admittedly being cons
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