ITC ON POWER SUBSTATION CONSTRUCTION IN FACTORY

We are planning to construct a power substation which will be installed in our factory for power distribution to different units of the factory. Can we take the ITC of inputs taken in the installation and construction of such substation. Is it considered as immovable porperty for disallowance of ITC.

Replies (4)
Quick Summary
This discussion explores the eligibility for Input Tax Credit (ITC) on the construction of a power substation for a factory. The core question revolves around whether a substation qualifies as 'plant & machinery' (eligible for ITC) or as an 'immovable property' (ineligible for ITC under Section 17(5)(d) of the CGST Act). Clarification suggests that while ITC on the substation's machinery parts may be claimable, the construction of the building or room to house it might not be, unless it's a shed specifically for the machinery.

As per section 17 (5) (d) of the CGST act 2017 Input Tax credit not available for construction of an immovable property . please confirm with others also .

Construction of immovable property except "Plant & Machinery". Also , definition of plant & Machinery included Machinery fixed to earth by foundation or structural support.

My query here is that whether such Power Substation falls in the category of Plant and Machinery used in the outward supply.

Any machinery(electical panel) parts being installed , the ITC can be claimed, but to cover or construct any building/room to keep those machinery therein the ITC on such construction would not be available. Yes if you are constructing shed to keep those machinery ( electric panel) then the ITC is available on both .

Sounds good. Yes we will only be taking the ITC for its installation work and foundation work etc. Thanks for the clarification.

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