Input tax credit— Section 16 of CGST Act— Applicant company is under the process of installation of a 620+ kW roof top “Solar Power Generating Plant” at its manufacturing unit for captive consumption of electricity so generated from the above plant for its PP/HDPE Woven Sacks manufacturing unit at Abu Road.

Question on which advance ruling sought is as follows—

“Whether the company is eligible to take input tax credit as 'inputs/capital goods' or 'input services' of the items enlisted in Annexure-B of this application in terms of Section 16 and 17 of the CGST/ RGST/ IGST Act? Additionally, whether the capital goods and inputs constitute plant and machinery of the Applicant which are used in the business of Manufacturing PP/HDPE Woven Sacks and hence not blocked input tax credit under section 17(5) of the CGST/ RGST/ IGST Act?”

The applicant company intend to install “Solar Power Generating Plant” at the roof top of its own building set up. The applicant has not submitted full procedure of the installation of the said plant. Further, the applicant has just furnished the list and has not furnished any documentary proof to establish that the goods listed in the statement furnished have been capitalised in their books of accounts. Therefore, subject to the goods being capitalised in their books of account, the applicant may be eligible to claim Input tax on such goods as 'Capital Goods' and the Provisions of Rule 43 of the GST Rules is applicable to determine the eligible credit in respect of the taxable supplies made by them. 

Held that— “Solar Power Generating Plant at rooftop of the building of applicant is an immovable property, however the said “Solar Power Generating Plant qualify as 'plant and machinery', hence it not covered under blocked credit as mentioned in 17(5)(d) of the CGST Act, 2017. Thus, the applicant is eligible for Input credit of Inputs, Capital goods and Services related to setting of Solar Power generator plant for captive consumption.