No ITC on goods/services used for installation of Solar Power Panels being Plant and Machinery

Last updated: 18 January 2023

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Quick Summary

The Tamil Nadu Authority for Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) cannot be claimed on goods and services used for the installation of solar power panels. These panels are considered 'plant and machinery' and are used for supplying exempted solar energy. Consequently, ITC is disallowed as per Section 17(2) of the CGST Act read with Rule 43(a) of the CGST Rules, which prohibit ITC on capital goods used exclusively for exempt supplies.

Court :
AAR, Tamil Nadu

Brief :
The AAR, Tamil Nadu in the matter of VBC Associates [Advance Ruling No. 10/2022/ARA dated August 31, 2022], has ruled that the assessee is not eligible to claim Input Tax Credit ("ITC"), as per Section 17(2) of the Central Goods and Services Tax Act, 2017 ("the CGST Act") read with Rule 43(a) of the Central Goods and Services Tax Rules, 2017 ("the CGST Rules") on the goods/services used for installation of Solar Power Panels, which are considered as Plant and Machinery.

Citation :
Advance Ruling No. 10/2022/ARA dated August 31, 2022

Daily Limit Reached