GST AAR: ITC allowed on goods/services used for construction of Fresh Water Storage Tank used as Plant and Machinery

GST AAR: ITC Allowed On Goods/Services Used For Construction Of Fresh Water Storage Tank Used As Plant And Machinery

The applicant, M/s. Nitta Gelatin India Limited, is a public limited company which manufactures Gelatin using Ossein, which is acquired from animal bones. The company manages two manufacturing units. One at Koratty for Ossein production and another at Kakkanad for Gelatin production. To boost the company’s operational efficiency at the Koratty facility, the company plans to build a freshwater storage tank with 2,000 KL capacity and a guard pond (effluent storage tank) with 7,000 KL capacity.

The applicant has made conversation with the Advance Ruling Authority to determine eligibility for claiming input tax credit on GST paid for goods and services used in this construction.

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Question Asked by Applicant

The applicant sought an advance ruling for the following questions:
“Query-1. The applicant is entitled to avail Input Tax Credit (ITC) on the GST paid on goods and services used for the construction of the Fresh Water Storage Tank?
Query-2: Whether the applicant is entitled to avail Input Tax Credit (ITC) on the GST paid on goods and services used for construction of the ‘Guard Pond’ (Effluent Storage Tank) to increase the storage capacity of the effluent storage facility for ensuring uninterrupted production process?”

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Advance Ruling

As per the Authority for Advance Ruling, Kerala
1.The applicant is eligible to claim Input Tax Credit (ITC) on the GST paid on goods and services used for construction of the Fresh Water Storage Tank, subject to its capitalization as plant and machinery and use in the manufacturing process.
2.The applicant is eligible to avail Input Tax Credit (ITC) on the GST paid on goods and services used for construction of the ‘Guard Pond’ (Effluent Storage Tank), subject to its capitalization as plant and machinery and its integral use in the manufacturing process.