Is ITC Allowed for Installation for Roof-Top Solar Systems (Advance Ruling Gujarat)

Advance Ruling in the matter of Unique Welding Products Pvt. Ltd. vs. GST AAR Gujarat, which deals with the eligibility of Input Tax Credit (ITC) on the installation and commissioning of a roof-top solar system.

Applicant:

Unique Welding Products Pvt. Ltd. is a manufacturer and seller of welding wires, registered under the CGST Act

Issue Involved:

The company installed a 440 KW roof-top solar system on its factory roof for captive power generation, using the generated electricity solely for manufacturing within the same premises. He sought an advance Ruling for Eligibility of Input Tax Credit (ITC) on the installation and commissioning of a roof-top solar system under the Central Goods and Services Tax (CGST) Act, 2017.

Advance Ruling Questions:

1. Whether the company is eligible for ITC on the roof-top solar system?
2. Whether the system constitutes plant and machinery, making it eligible for ITC under section 17( 5) of the CGST Act?

Background and Arguments:

Applicant Installed a 440 KW roof-top solar system for captive power generation.
Company seeks an advance ruling for eligibility of ITC under sections 16 and 17 of the CGST Act.
Company raised questions on ITC eligibility for the purchased solar system and whether it qualifies as plant and machinery.

Reasoning for the Ruling:

The roof-top solar system is not permanently fastened to the building, making it distinct from immovable property.

• The system qualifies as plant and machinery used in the furtherance of business, fulfilling the requirements for ITC under section 17( 5 ).
• Reference to a previous ruling further substantiates the applicant's eligibility for ITC.

Question Raised and Ruling:

Eligibility for ITC: Unique Welding Products Pvt. Ltd. is eligible to avail ITC on the roof-top solar system with installation & commissioning under the CGST/GGST Act.

Plant and Machinery Status: The roof-top solar system, with installation and commissioning, constitutes plant and machinery for the applicant, making it eligible for ITC under section 17( 5) of the CGST/GGST Act.

Conclusion:

The ruling provides clarity on ITC eligibility for businesses investing in roof-top solar systems. The distinction between immovable property and plant and machinery, along with references to relevant sections and previous rulings, contributes to a comprehensive understanding of tax implications for sustainable energy installations.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.