GST AAR: ITC Allowed on CCV Tower Used in Cable Manufacturing Process

The Gujarat Authority for Advance Ruling (GAAR) on 8 May 2026 held that Input Tax Credit (ITC) is available on the construction of specialized CCV Towers used in cable manufacturing, treating such structures as “plant and machinery” under the GST law. In the case of M/s Apar Industries Ltd., the Authority ruled that the restriction under Section 17(5)(d) of the CGST Act would not apply where the structure itself forms an integral part of the manufacturing process.

“The tower cannot be treated as an ordinary civil structure when its very design, height and engineering specifications are dictated by the manufacturing requirements of the CCV process.”

Apar Industries Ltd., engaged in the manufacture of insulated electrical cables, had constructed a Catenary Continuous Vulcanization (CCV) Tower through an EPC contractor for installation of its manufacturing line. The applicant sought an advance ruling on whether GST paid on construction services and materials used for the tower would qualify for ITC or stand blocked as expenditure incurred towards immovable property under Section 17(5)(d) of the CGST Act.

The applicant submitted that the CCV Tower was a highly specialized industrial structure designed exclusively for the vulcanization process involved in cable manufacturing. It was argued that the vertical arrangement of the production line was technically necessary to ensure uniform insulation curing and to prevent sagging or deformation of cables during the manufacturing process. According to the applicant, the tower functioned as a structural support and operational component of the plant itself.

The Revenue viewed the structure as an immovable civil construction and contended that ITC on such construction activity was restricted under the blocked credit provisions contained in Section 17(5)(d).

Before the Authority, Apar Industries relied on the “functional test” evolved through judicial precedents to contend that structures specifically engineered for manufacturing operations should be treated as part of the plant and machinery. The applicant emphasized that the tower was not a general-purpose building but an inseparable part of the production apparatus.

“Without the specific vertical structure of the CCV Tower, the manufacturing process itself cannot be carried out in the intended manner.”

The Authority accepted the applicant’s contention and observed that the CCV Tower was constructed solely to support and house the specialized manufacturing line. It noted that the structure derived its existence and design entirely from the technical requirements of the production process and therefore could not be equated with a conventional building or civil structure.

The GAAR further observed that the definition of “plant and machinery” under the GST law includes foundations and structural supports used for apparatus and machinery. Since the CCV Tower performed the role of structural support integral to manufacturing operations, the restriction under Section 17(5)(d) was held to be inapplicable.

Thus, the Authority ruled in favour of Apar Industries Ltd. and held that ITC on goods and services used for the construction of the CCV Tower is admissible under the CGST/GGST Act, 2017.

To Read Full Order, Download PDF Given Below.