Input tax credit— Section 17(5) of CGST Act— The present appeal has been filed against the Advance Ruling order pronounced by the Maharashtra Authority for Advance Ruling.
The Appellant is a co-operative housing society registered under the Maharashtra State Co-operative Societies Act. 1960.
The Appellant society had filed the impugned Advance Ruling Application for determining following three questions:-
a) Whether the activities carried out by the applicant for its members qualify as “supply” under the definition of section 7 of the CGST Act, 2017.
b) Whether the applicant is liable to obtain registration under the GST law?
c) If the activities of the applicant are treated as “supply” under the CGST Act, 2017 then whether the applicant is eligible to claim the ITC on input and inputs services for repairs, renovations & rehabilitation works carried out by the Applicant?
The advance ruling authority has determined the question of eligibility of ITC against the Appellant society and held that Appellant society is not eligible for ITC in view of the restrictions imposed under section 17(5)(c) of the CGST Act, 2017.
The moot issues before us is as to whether the Appellant can be construed as providing works contract services to its members while undertaking the activities relating to major repairs, renovations and rehabilitation works for the society by entering into an agreement with a contractor, namely, M/s. Unique Rehab Pvt. Ltd., which carry out the said repair, renovation, and rehabilitation work of the society. In this regard, the main contention of the Appellant is that since they are receiving services in the nature of works contract from their appointed contractor, and rendering the same without altering its characteristics to the members, therefore, their activities in this regard will also be construed as works contract services.
Appellant contended that since they are providing works contract services to their members and charging GST at the prescribed rale of 18% thereon, accordingly, they are eligible for ITC of the tax paid on the works contract services being received from their contractor in term of the provisions of section 16 read with the exclusion clause provided under section 17(5)(c) of the CGST Act, 2017.
Held that— The Appellant-society is not eligible to avail ITC of the tax paid on the works contract services received from their appointed contractor in terms of the limitations provided under section 17(5)(c) of the CGST Act, 2017, as they cannot be said to be providing works contract.