ITC on newly setup

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This discussion clarifies Input Tax Credit (ITC) eligibility for items purchased during the construction of a new plant. Generally, ITC is not available for materials like cement, MS, and electrical fittings used for the building's construction or for fixed immovable assets like machinery bases and diesel tanks, as these are blocked under Section 17(5). However, ITC is available for electrical fittings specifically for plant and machinery, and for mobile phones used for vendor communication.

Rakesh Sharma

Rakesh Sharma (Querist)

21 January 2021 Dear Experts, we are constructing a Plant & have purchased the below details ITEMS :-
1) We have purchased Cement, MS, SS etc. for the building. ITC available or not.
2) We have purchased Cement, MS etc. for the base for machinery. ITC available or not.
3) We have purchase DG Set along with cement, MS, PVC pipe to prepare the diesel tank. ITC available or not.
4) Sir, we have purchased Electricals fitting items for the building. ITC available or not.
5) We have purchased Electricals fitting items for Plant & Machinery. ITC available or not.
6) We have purchased Mobile Phone for communication with various Vendors. ITC available or not.

Kindly suggest.

Rakesh Sharma

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 January 2021 1 and 4 ITC not available.
2, 3, 5 and 6 ITC available.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

21 January 2021 1. No, blocked u/s 17(5). 2. No, same belongs to fixed immovable assets and blocked u/s 17(5). 3. Diesel Tank is also fixed in nature and cement used in purchasing it also blocked u/s 17(5) 4. Electrical fitting for the building is also improvement for building and same is also blocked u/s 17(5). 5. Allowed 6. Allowed

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