Treading the GST Path – XXXI - ITC on Capital Goods & Rule 43

Though u/s 140(3) of the CGST Act, a registered person who was providing works contract service and was availing of the benefit of Notfn. No. 26/2012-ST dt. 20/06/12, is entitled for input tax credit in respect of inputs in stock, and the inputs contained in "Semi finished goods or finished goods held in stock on the appointed day", can the semi-finished buildings or finished buildings, as on 01/07/2017 and in respect of construction of which GST is payable, be treated as semi finished goods or finished goods for the purpose of Section 140(3)? A plain reading of this section would show that transitional credit to builders and building contractors is available only in respect of inputs lying in stock as on 01/07/17,and not on the inputs - cements, steel bars, etc contained in the buildings under construction as on 01/07/17, as the buildings are not goods . Though Sec 140(3) has been made applicable to building contractors and builders, it has been drafted keeping only the manufacturers in mind.

Rakesh Kumar
Member, CESTAT (retd.)

Demo User 31/08/2017