The Tamil Nadu Bench of Authority of Advance Ruling has held that GST ITC allowed on steel reinforcements for expansion of factory for manufacturing activity.
The bench of I.R.S. C.Thiyagarajan and B.Suseel Kumar has observed that the Applicant would be eligible for input tax credit proportionate to the extent of steel structural support erected in relation to the secondary steel works that is attributable to the support of HVAC machine and overhead crane movement only, subject to fulfilment of conditions stipulated in Section s 17(5)(c) and 17(5)(d) of the CGST Act, 2017 and the explanation thereunder.
The applicant is engaged in the business of manufacture of injection moulding machinery and accessories. They further stated that they are expanding their business operation and have constructed a new factory adjacent to its existing factory and incurred capital expenditure towards procurement in relation to setting up of this factory. The applicant for the purpose of the factory expansion project, had entered into a contract with Mis. SMCC Construction India Ltd (Supplier or Vendor) for construction of its new factory. Perusal of the invoices issued reveals that the above said construction works falls under SAC 995413 – Design and Construction services of Greenfield Industrial Building Project (Package 1), leviable to 18% GST.
The applicant sought the advance ruling on the issue of whether Input Tax Credit (ITC) is eligible on steel reinforcements for expansion of factories for manufacturing activity? What should be the basis to arrive at the timeline to avail ITC on tax invoice raised by Supplier to bill “Advance Component” of the Contract and Subsequent Adjustment ofAdvance in the Service Bills showing both Gross and Net amount.
The AAR ruled that the timeline to avail ITC on tax invoice raised by Supplier to bill “Advance Component” of the Contract is already covered under the provisions of Section 16(4) of the CGST Act, 2017, which stipulates that ITC shall be availed by the recipient before the thirtieth day of November following the end of financial year to which such invoice pertains or furnishing of the relevant annual return, whichever is earlier.
Ruling Details
Applicant’s Name: Shibaura Machine India Private Limited
Ruling Date: 2025-09-02
