• Help Line: +91-8178908220, +91-8920931648
  • Login

Bombay HC issues notices to Centre, Maharashtra over blocking of ITC

  • 26 Jan 2022
  • Edukating Team
  • 375

The Bombay High Court has issued notices to the Centre and the Maharashtra government over a petition that seeks to declare as unconstitutional, a provision in the GST laws which empowers the authorities to block input tax credit (ITC) on works contract services in the real estate.

The petitioner, which is engaged in the business of renting and leasing out movable and immovable properties, challenged the section 17(5)(c) of the Central GST (CGST) Act and the same section in the Maharashtra GST Act. The section prohibits input tax credit to the works contract service for construction of an immovable property other than the plant and machinery except where it is an input service for further supply of works contract.

Works contract is essentially a contract of service which may also involve supply of goods in the execution of the contract.

The petitioner entered into a master rental agreement with a company to provide it furnished premises on lease. The petitioner procured works contract services to make the premises.

By virtue of the section cited above, ITC on works contract services used by the petitioner stands denied.

Source form - https://www.business-standard.com/article/economy-policy/bombay-hc-issues-notices-to-centre-maharashtra-over-blocking-of-itc-122012400914_1.html

whatsup