Roof Solar Plant Classifiable under Plant and Machinery, Eligible for ITC: AAAR [Read Order]
Roof Solar Plant – Solar Plant – Roof Solar – Solar Plant Classifiable under Plant and Machinery – Classifiable under Plant and Machinery – TAXSCAN
Roof Solar Plant – Solar Plant – Roof Solar – Solar Plant Classifiable under Plant and Machinery – Classifiable under Plant and Machinery – TAXSCAN
The Gujarat Appellate Authority for Advance Ruling (AAAR) observed that roof solar plant classifiable under plant and machinery and hence eligible for input tax credit (ITC).
M/s. The Varachha Co-Op. Bank Ltd, is the appellant in the present matter.
The solar equipment can be qualified as ‘Plant and Machinery’ will be used for furtherance of business i.e. in its business of supplying taxable service. Even though generation of electricity is an exempt supply, the appellant will he using electricity solely & consuming it captively for the purpose of supplying taxable services. From the above it is inferred that the ‘Roof Solar Pant’ will be attached to earth for operational efficiency.
The whole purpose behind attaching it to a concrete base will be to secure maximum operational efficiency and for safety purpose. Further, it is also seen that the ‘roof solar plant’ is saleable and that if’ somebody wants to purchase, it can be dismantled and sold. Further, it would not he correct to hold that the ‘Roof Solar Plant’ assembled and erected at the premises of the appellant is an immovable property.
The appellant on the basis of above submissions requested to set aside the ruling issued by the GAAR (to the extent ITC is disallowed) and allow ITC on the inward supply of the goods/ services as mentioned in the appeal.
‘Immovable property’ is not defined under GST. However, its defined under section 3(26) of the General Clauses Act, 1897 to include land, benefits to arising out of land and things attached to the earth, or permanently fastened to anything attached to the earth. Likewise, section 3(36) of General Clauses Act, 1897, defines “movable property” to mean property of every description, except immovable property.
A Two-Member Bench of the Authority comprising Samir Vakil, Member SGST and BV Siva Naga Kumari, Member CGST observed that “It is abundantly clear that the roof solar plant, affixed to foundation via nuts and bolts and which has the flexibility of 4 different angles is not an immovable property but a plant and machinery. 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 we hold that the applicant is eligible for input tax on roof solar plant.”
To Read the full text of the Order CLICK HERE
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