Question19: Please intimate if ITC of GST paid on insurance of factory building & machinery is permitted under GST law.

Answer: Section 17(5)(d) of CGST Act, 2017 prohibits ITC on goods or services or both when received by a taxable person for construction of an immovable property  (other than plant and machinery) on his own account including when such goods or services or both are used in the course of furtherance of his business. However, ITC of tax paid on insurance of building and machinery has not been prohibited under the said Section. Accordingly, it is understood that ITC of tax paid on insurance premiums for buildings and machinery is entitled.  (Reply dt. 04/12/2017)