Can we avail ITC for Construction of spinning unit

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This discussion clarifies the eligibility of Input Tax Credit (ITC) for the construction of a spinning mill. While ITC is generally not available for the building construction itself, it can be claimed on the machinery used for spinning, even if it's fixed to the earth with structural supports. The key distinction lies in classifying the expenditure as either building construction or plant and machinery.

muthusundar

muthusundar (Querist)
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20 October 2020 Dear Experts,
can we avail ITC for construction of spinning mill? We are constructing one spinning mill. will it comes under building account or Plant & Machinery Account?

Explanation for the purpose of Chapter V and Chapter VI of the CGST Act, 2017 states that “plant and machinery” means apparatus,. Equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes-

In spinning mill we are going to fixed the machinery In the earth (Structural support)

Looking forward experts explanation in this regard.

Lekhraj sood

Lekhraj sood (Expert)
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20 October 2020 Yes, The ITC will be available on the machinery used for spinning even though it is fixed to earth with structural support.

muthusundar

muthusundar (Querist)
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20 October 2020 Thank you for your reply. can we claim the ITC for Building constructed for Spinning unit. will it come plant & Machinery account or Building Account.

Lekhraj sood

Lekhraj sood (Expert)
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20 October 2020 No,not on building construction.

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