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Plant & Machinery installed for generation of electricity is eligible for ITC provided electricity so generation is used for captive consumption.

Input Tax Credit — The applicant has two cement manufacturing units and recently installed a Captive solar electricity power plant. The applicant received a license to set-up and produce electricity. The applicant has entered into a Wheeling and Banking agreement with KPTCL and GESCOM &HESCOM in respect of the power produced from the solar power plant. The Applicant sought clarification in respect of the inputs, input services and capital goods received towards erection, installation and commissioning of the solar power plant. Thus, approached the authority of Advance Ruling which ruled out that the applicant company is required to reverse input tax credit on the unutilized electric energy banked with KPTCL, GESCOM & HESCOM and for which the applicant receives a consideration in terms of the Wheeling and banking agreement. Further, the Applicant shall be shall be entitled to the eligible input credits in entirety provided the entire production is captively consumed. — Keshav Cement And Infra Limited, In Re… [2019] 16 TAXLOK.COM 087 (AAR-Karnataka)