Real estate seeks input tax credit for leasing activities

Realty developers and global institutional investors with exposure to commercial real estate have approached the government seeking input tax credit (ITC) for leasing activity. Representatives from international funds, private equity players and leading real estate developers will be meeting officials of the Ministry of Finance this week following the submissions made by them in this matter, media sources say. These entities are seeking input tax credit on goods or services used for the construction of immovable property against leasing services, which is currently restricted under Section 17(5) of the Central Goods & Services Tax Act, 2017. Under the earlier service tax regime, a developer constructing premises used for leasing was not restricted from availing Central Value Added Tax (CENVAT) credit (input tax credit) on service tax paid on services other than works contract services. Under the current GST regime, credit on all inputs and input services are blocked to the same developer, as per a submission made to the government by Asia Pacific Real Estate Association. Image Source4th Indian Cement Review Conference 20214th Indian Cement Review Conference 202117-18 March  Click for event info