ITC Not Permissible on Goods and Services used in Construction of Warehouse for Letting Out on Rent – AAR Maharashtra

Facts of the Case:

• Applicant, being clearing and forwarding agent, stores goods of other company in warehouse and charges rent for the same.
• Applicant had incurred certain expenses on construction and maintenance of such warehouse. In this regard ruling has been sought on
• Whether ITC can be claimed on: (i) goods purchased for construction and maintenance of warehouse; and (ii) work contract service received for construction and maintenance of building.

Observation and Findings:

• Section 17(5)(d) restricts the eligibility of input tax credit in respect of goods or services or both received for construction of an immovable property even when such goods or services or both are used in the course or furtherance of business.

Ruling:

• Considering the above provision of law, the Authority has passed the ruling that, “No ITC of GST paid is admissible (i) on goods purchased from contractor for the purpose of construction and maintenance of warehouse; or (ii) services received from contractor for construction & maintenance of warehouse,”

 Source [2020] 115 taxmann.com 147 (AAR – MADHYA PRADESH), March 13, 2020