ITC credit availability

Under GST in India, ITC can be claimed on goods and services used for business purposes. For wind mills (renewable energy projects), expenses like installation costs and taxes paid on those expenses can typically be eligible for ITC if used for business. 

When selling the wind mill, if it is a taxable supply under GST, you would need to consider GST  implications on the sale. But if the sale is exempt (like some renewable energy equipment sales might be), ITC rules might differ. 

1. ITC on erection/installation of windmill

• Section 17(5)(c) & (d), CGST Act: ITC is blocked on works contract services or goods/services used for construction of immovable property (other than plant & machinery).

• However, plant & machinery is specifically defined to include windmills, their foundation and structural support.
  ✅ Therefore, ITC on erection, installation, and related expenses for windmills is allowed, provided the windmill is used for making taxable outward supplies (like sale of electricity).

2. At the time of sale of windmill

• Sale of windmill (after years of use) is considered supply of goods (since it is movable plant & machinery).

• GST will be payable on transaction value under HSN 8502 (electric generating sets, wind powered), generally 12% GST.

• The ITC availed earlier on erection/installation does not need reversal at the time of sale, since it was correctly availed.

3. If it was treated as immovable property

• If windmill was capitalized as immovable property (for example, permanently embedded and not treated as plant & machinery), then ITC on erection/construction would not have been available in the first place.

⚖️ Summary:

• If windmill is treated as plant & machinery → ITC on erection/installation is eligible.

• On later sale of windmill, GST is payable on sale value, but no ITC reversal is required.