Capitalisation of plant and machinery

IF NEW STRUCTURE IS CREATE WHAICH IS BIG AMT THEN CAPITALISED OTHERTWISE TRANSFER TO REPAIR TO MAINTAINACE

COMPANY IS ALREADY OPRATIVE ,IF EXPANSION FOR NEW PRODUCT THEN IT CAN BE TRANSFER TO PRE-OPRATIVE EXPENSES

IF EXISTING PRODUCT NOT NEW PRODUCT THEN CANNOT TRANSFER TO PRE OPRATIVE

For erection of plant and machinery any civil work done for this erection has been capitalised to plant and machinery only .

any expenses made for set up of a new unit can be deductible as expenses in the books of account. from the starting of the unit till the government notification all expenses made shall be allowed as deduction in the particular year only.

can we claim GST ITC on the civil works done to erect the machinery?

Civil work tied to machinery goes with the machinery:

• Foundations, platforms and structures built specifically to install or support machinery (machine foundations, bases, pits) are part of the machinery's cost (AS 10 / Ind AS 16: costs to bring the asset to working condition, including installation and site preparation).

• General building improvements (flooring of the whole shed, walls, roof) go to factory building.

• Tax: depreciation follows. Foundations and structures integral to machinery are plant (15%). Building is 10%. Courts have accepted foundations as plant.

• GST: ITC on goods or services for "plant and machinery", which includes foundations and structural supports used to fix the machinery to earth, is not blocked (Explanation to Sec 17(5)(c)/(d)). ITC on civil works for the building itself is blocked.

• Keep the contractor's bills split between machine foundation work and general civil work to support the treatment.