Case Details: Pristine Industries Ltd., In re [2022] 142 taxmann.com 583 (AAR–RAJASTHAN)
Judiciary and Counsel Details
- J.P. Meena, Member (Central Tax) & M. S. Kavia, Member (State Tax)
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Rohit Jain, CA for the Applicant.
Facts of the Case
The applicant, a registered manufacturer of PP/HDPE woven sacks, initiated installation of a rooftop solar power generating plant of more than 620 kW on the roof of its factory for captive consumption through a work order covering design, supply, storage, civil work, erection, testing, and commissioning. It procured solar panels, transformers, meters, wiring, and related items, and treated the plant as plant and machinery to be capitalised. The matter was accordingly placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that the rooftop solar power generating plant, though immovable as it is fastened to structures attached to the earth, falls within ‘plant and machinery’ as defined in the explanation to Section 17(5) of the CGST Act/Rajasthan GST Act, which includes apparatus, equipment, and machinery fixed to earth by foundation or structural support while excluding land, building, telecom towers, and pipelines outside the factory premises. The authority held that Section 16 of the CGST Act/Rajasthan GST Act permits input tax credit subject to prescribed conditions and that the restriction in Section 17(5)(d) of the CGST Act/Rajasthan GST Act concerning construction of immovable property on own account does not apply to plant and machinery. It further held that the solar plant was used for captive generation in the manufacturing process and therefore the bar on blocked credit was not attracted. The authority concluded that input tax credit on inputs, capital goods, and input services used for setting up the plant is admissible subject to compliance with Section 16 and capitalisation requirements.
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