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[F. No.334/1/2017 -TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 28th June, 2017
Notification No. 15/2017 - Union Territory Tax (Rate): To notify the supplies not eligible for refund of unutilised ITC under UTGST Act
GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R......(E).- In exercise of the powers conferred by clause (xiv) of section 21 of the Union Territory Goods and Services Tax, 2017 (14 of 2017), read with sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council
hereby notifies that no refund of unutilised input tax credit shall be allowed under clause (xiv) of section 21 of the said Union Territory Goods and Services Tax Act, read with sub-section (3) of section 54 of the said Central Goods and Services Tax Act, in case of supply of services specified in sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act, 2017.
2. This notification shall come into force with effect from the 1st day of July, 2017.
(Ruchi Bisht)
Under Secretary to the
Government of India
📚 Frequently Asked Questions (FAQs): Notification No. 15/2017 - Union Territory Tax (Rate)
Q1. What is Notification No. 15/2017-UTT(R)?
Answer: It is a GST notification restricting refunds of unutilised ITC for specified services.
The notification applies to services covered under Schedule II Item 5(b) of the CGST Act.
Q2. When did the notification become effective?
Answer: It became effective from 1 July 2017.
This was the same date on which GST was implemented across India.
Q3. Does the notification block all ITC?
Answer: No.
It restricts refund of unutilised ITC but does not automatically deny ITC availability itself.
Q4. Which services are affected?
Answer: Construction-related services covered under Schedule II Item 5(b).
These generally involve construction of buildings intended for sale before completion.
Q5. Can builders claim ITC?
Answer: Subject to applicable GST provisions, ITC may be available.
However, refund of accumulated ITC is restricted under this notification.
Q6. Why did the government impose this restriction?
Answer: To create a specific exception within the GST refund framework.
The construction sector has unique tax characteristics that influenced policy decisions.
Q7. What is unutilised ITC?
Answer: It is GST credit that remains unused after adjusting against output tax liability.
In some sectors, such balances can accumulate over time.
Q8. Does the notification apply to goods?
Answer: No.
The notification specifically refers to the notified category of services.
Q9. Is Schedule II classification important?
Answer: Extremely important.
The notification's applicability depends directly on whether the supply falls under Item 5(b).
Q10. Does the restriction affect residential projects only?
Answer: Not necessarily.
The determining factor is the nature of the service covered under Schedule II Item 5(b), not merely whether the project is residential or commercial.
Q11. Can future amendments change this position?
Answer: Yes.
GST laws and notifications are regularly updated, so businesses should monitor developments.
Q12. Does this notification apply throughout India?
Answer: It specifically applies under the UTGST framework.
Corresponding provisions exist under CGST and related GST notifications.
Conclusion
Notification No. 15/2017-UTT(R) is a small but significant GST notification that restricts refund eligibility for unutilised ITC relating to specified construction services. While businesses may continue to accumulate GST credits, the notification clearly prevents those credits from being converted into refunds in notified cases.
For developers, construction companies, and GST professionals, understanding this distinction between ITC availability and ITC refund eligibility is essential for accurate compliance and better financial planning.
Download PDF: Notification No. 15/2017 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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