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Mumbai: Mahavir Nagar Shiv Srishti Co-operative Housing Society (CHS) located in Kandivali has not been successful in its appeal. Appellate Authority for Advance Rulings (Maharashtra). input tax credit For Goods and Services Tax (GST) borne by it, CHS was disbursed against payment for repairs to a third party contractor.
A building was constructed on the plot allotted by Mahavir Nagar Shiv Srishti CHS MHADA and was registered under GST. AAAR held that CHS itself is not a ‘works contracting’ service provider, nor is it in the business of providing works contracting services. “The works contract services received by a society from an appointed contractor are for the common benefit of its members. Hence, the contention of CHS that they are providing works contract services to their members. And hence the payments made to their appointed contractor There may be disagreement with respect to the tax eligible for Input Tax Credit (ITC).
The AAAR bench pointed out that the CHS provides a number of services, such as security services, cleaning services, etc., for the benefit of its members. It recovers the cost from the members through maintenance charges. CHS does not claim to be a provider of such services. The AAAR bench said, “Thus, it is abundantly clear that CHS is trying to take the stand that it provides works contract services to its members to avail ITC of tax paid to the contractor, Which is not otherwise available under the restrictions imposed under section I 7(5)(c) of the GST Act.
According to tax experts, it is clear that a CHS is entitled to ITC in respect of GST paid by him on the purchase of capital goods – such as water pumps, generators. However, whether it can claim ITC for GST borne on repair bills has been a matter of litigation. If input tax credit was allowed, it would have reduced the GST outgo for Mahaveer Nagar Shiv Srishti CHS. While advance rulings do not set a precedent, a favorable ruling enhances the standing of other parties in similar cases.
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