9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (1) TMI 659 - AAR - GSTInput tax credit - blocking of input tax credit - inputs/capital goods or input services on the purchased rooftop solar system with installation commissioning - rooftop solar system with installation and commissioning constitute plant and machinery of the applicant which are used in the business of manufacturing welding wires - sections 16 17 of the CGST/GGST/IGST Act - HELD THAT - The roof solar plant, affixed on the root of the building is not embedded to earth. Accordingly it is not an immovable property but a plant and machinery, which is utilized to generate electricity which is further solely and captively used in the manufacture of welding wires. The applicant is engaged in the business of supply of welding wires on payment of GST at the applicable rates. The applicant has further stated that they have capitalized the roof solar plant in their books of accounts. The Roof Solar Plant, as is evident is not permanently fastened to the building. Thus, it qualifies as a plant and machinery and is not an immovable property, hence, it is not covered under blocked credit as mentioned in 17(5)(d) of the CGST Act, 2017. Therefore the applicant is eligible for input tax on roof solar plant. The applicant is eligible to avail ITC on roof top solar system with installation commissioning under the CGST/GGST Act - The roof top solar system with installation and commissioning constitute plant and machinery of the applicant and hence is not blocked ITC under section 17(5) of the CGST/GGST Act.
Issues Involved:
1. Eligibility for Input Tax Credit (ITC) on rooftop solar system under sections 16 and 17 of the CGST/GGST/IGST Act. 2. Classification of the rooftop solar system as plant and machinery and its exclusion from blocked ITC under section 17(5) of the CGST/GGST/IGST Act. Summary: Issue 1: Eligibility for ITC on Rooftop Solar System The applicant, engaged in the manufacturing and sale of welding wires, installed a 440 KW rooftop solar system for captive power use. They sought an advance ruling on whether they could claim ITC on the inputs, input services, and capital goods used for the installation and commissioning of the rooftop solar system under sections 16 and 17 of the CGST/GGST/IGST Act. The applicant argued that their business activities qualify as 'business' under section 2(17) of the CGST Act, and thus, they are eligible for ITC on supplies used in the course or furtherance of business. Issue 2: Classification as Plant and Machinery The applicant contended that the rooftop solar system should be classified as 'plant and machinery' and not as immovable property, hence not falling under blocked credits as per section 17(5)(d) of the CGST Act. They provided evidence including photographs, financial statements, and an interconnection agreement with Madhya Gujarat Vij Company Ltd (MGVCL). The solar plant is bolted to the factory roof and can be dismantled and sold, indicating it is not permanently fastened and thus not immovable property. Discussion and Findings: The Authority examined the relevant sections of the CGST Act and the submissions made by the applicant. They noted that the rooftop solar system is not embedded to earth and qualifies as plant and machinery. The electricity generated is solely used for manufacturing within the same premises, and the solar system is capitalized in the applicant's books of accounts, confirming it is not an immovable property. Ruling: 1. The applicant is eligible to avail ITC on the rooftop solar system with installation and commissioning under the CGST/GGST Act. 2. The rooftop solar system constitutes plant and machinery of the applicant and is not blocked ITC under section 17(5) of the CGST/GGST Act. The ruling was further substantiated by a similar decision in the case of M/s. The Varachha Cooperative Bank Limited, Surat.
|
