ITC can’t be availed on works contract service for construction of factory building: AAR
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- Last Updated on 17 February, 2026
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Case Details: Authority for Advance Rulings, Telangana Vijayneha Polymers (P.) Ltd., In re - [2021] 133 taxmann.com 223 (AAR- TELANGANA)
Judiciary and Counsel Details
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- B. Raghu Kiran, IRS, Additional Commissioner (Central Tax)
- S.V. Kasi Viswewara Rao, Additional Commissioner (State Tax)
Facts of the Case
The applicant was constructing a factory building and it hired works contractors for executing the construction work. It filed application of advance ruling and ruling was sought on the availability of input tax credit (ITC) on GST charged by the contractor supplying works contract service relating to construction of factory building.
AAR Held
The Authority for Advance Ruling observed that Section 17(5) of the CGST Act, 2017 restricts the availment of ITC in respect of 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. Thus, it was held that ITC can’t be availed on works contract services for construction of an immovable property except for erection of plant & machinery.
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CA | CS | CMA
20 Dec 2021 | [2021] 133 taxmann.com 223 (AAR – TELANGANA)[09-12-2021]
In the above case is there any difference if the owner builds premises not by giving works contract but by departmentally on its own by purchasing material availing labour & other services?