ITC can be Availed on Capital Goods used in Transmission of Electricity from Power Station To Factory Premises: AAR [Read Order]
It was held that the applicant is eligible to take ITC on the capital goods used for transmission of electricity from the power station of the DISCOM to the factory premises of the applicant.
Input Tax Credit (ITC) – Capital Goods ITC ITC – on Electrical Equipment – ITC on Transmission of Electricity – taxscan
Input Tax Credit (ITC) – Capital Goods ITC ITC – on Electrical Equipment – ITC on Transmission of Electricity – taxscan
In a recent ruling, the Gujarat Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) can be availed on capital goods in the form of wires/cables electrical equipment etc,630 mm square aluminium corrugated sheath/G cable line for installation of 66 KV feeder bay at the substation of GETCO) used for transmission of electricity from power stations of Distribution Companies (DISCOM) to factory premises.
Elixrr Industries Pvt Ltd, the applicant is a 100% EOU who has been granted the letter of permission (LoP) by the Development Commissioner, Kandla SEZ, Gandhidham, for the manufacture of hydro entangled (spun lace) non-woven products. The applicant requires 1000 KVA power on 66 KV system voltage for its electricity/HT Power connection. The applicant needs to install a 66 KV feeder bay at the substation of GETCO under the deposit scheme & also lay a 750 metres new 66 KV S/cable (3+1),630 mm square aluminium corrugated sheath U/G cable line from 66 KV Palej substation of GETCO to their switchyard at their Palej factory.
The application was submitted on the issue of whether a manufacturer is eligible to take ITC on the capital goods in the form of wires/cables electrical equipment etc used for transmission of electricity from the power station of the DISCOM to the factory premises of the registered person which are installed outside factory premises as per rules and policy of GETCO, Government of Gujarat Electricity distribution company.
Before the authority, it was contended that it had satisfied all four conditions in terms of section 16 of the CGST Act, 2017. It was stated that they were in possession of the tax invoice issued by the supplier and they have received the goods and services. Further submitted that the tax charged has been paid to the Government and the return has been furnished under section 39 and the payment was made to the supplier within 180 days.
The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that there is no provision under the Center Goods and service tax ( CGST ) Act, 2017 which bars availment of ITC by the applicant if subsequently the capitalised goods are handed over to Gujarat Energy 'Transmission Corporation Ltd. (GETCO)/others.
The ruling authority has held that the applicant is eligible to take ITC on the capital goods in the form of wires/cables electrical equipment etc,630 mm square aluminium corrugated sheath/G cable line for installation of 66 KV feeder bay at the substation of GETCO) used for transmission of electricity from the power station of the DISCOM to the factory premises of the applicant.
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