Manager - Finance and Accounts
59298 Points
Joined June 2010
Yes — there are case laws and advance rulings directly relevant to ITC on ACs / HVAC / VRF systems.
Here are the most useful ones you can cite:
✅ 1. JEANS KNIT PRIVATE LIMITED
AAR – Tamil Nadu
Order No.: TN/24/AAR/2020
Date: 20.05.2020
Key point:
The Authority held that Input Tax Credit is allowed on Air-Conditioners and Cooling Systems installed in factory premises, because they fall under “plant & machinery” and are NOT part of immovable property.
👉 Very strong ruling in favor of ITC on ACs / VRF-type systems.
✅ 2. Spenomatic India Pvt Ltd
AAR – Karnataka
Order dated: 17.09.2020
Held:
AC systems and HVAC equipment used in manufacturing or business premises are eligible for ITC because they are not part of construction of immovable property, but capital goods used for business.
✅ 3. Tarun Realtors Pvt Ltd
AAAR – Maharashtra
Date: 24.11.2021
Held:
HVAC & VRV/VRF systems embedded in civil structure (i.e., part of building construction) → ITC BLOCKED u/s 17(5)(c)/(d).
But if AC/VRF is not capitalised as immovable property, ITC is allowed.
👉 This ruling is important because it makes a clear distinction:
✅ 4. Wolkem India Pvt Ltd
AAAR – Rajasthan
Date: 22.03.2019
Held:
HVAC, cooling machinery, and ventilation systems installed in a factory qualify as Plant & Machinery → ITC allowed.
📌 What these rulings collectively establish
✔ ITC allowed when:
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VRF/VRV ACs are used for business
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Installed in offices/factories/shops/warehouses
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Treated as plant & machinery
-
Not capitalised as part of building construction
❌ ITC not allowed when:
✅ Best ruling for your case (most cited)
JEANS KNIT PVT LTD (Tamil Nadu AAR)
Very clear language that ITC is eligible on ACs used in business and treated as plant & machinery.