ITC admissible for capital goods and related services used to lay electricity transmission infrastructure outside the factory

Last updated: 27 November 2025

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The Gujarat Authority for Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) is admissible for capital goods and related services used to establish electricity transmission infrastructure, such as underground cables and equipment, even if these are installed outside the factory premises. The ruling clarifies that these items are considered movable 'plant and machinery' and do not fall under the blocked credit provisions of Section 17(5) of the CGST Act, provided the general conditions for ITC under Section 16 are met.

Court :
Gujarat AAR

Brief :
The Gujarat AAR in the matter of Alleima India Pvt Ltd [Advance Ruling No. GUJ/GAAR/R/2025/44 GST, order dated October 16, 2025] held that input tax credit (ITC) is available on capital goods and related services used for laying underground cables and transmission equipment from the DISCOM substation to the factory premises, even if installed outside the factory premises, subject to the conditions in Section 16 and exceptions in Section 17(5) of the CGST Act.

Citation :
Advance Ruling No. GUJ/GAAR/R/2025/44 GST, order dated October 16, 2025

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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