GST Alert: Miss ITC Claim by Nov 30 & Lose It Forever, AAR:

GST Alert: Miss ITC Claim by Nov 30 & Lose It Forever, AAR The present application (Form GST ARA-01) has been filed by a company named Mis. Shibaura Machine India Private Limited (Applicant) before the Authority For Advance Ruling, Tamil Nadu No. 207, 2nd Floor, Papjm Building, No. 1, Greams Road, Chennai 600006. The authority received the application on October 4, 2024. The benches comprised Shri C. Thiyagarajan, I.R.S., Additional Commissioner/Member (CGST) and Shri B. Suseel Kumar, B.E., MBA, Joint Commissioner/Member (SGST) and the decision was announced under Section 98(4) of the CGST Act, 2017 and under Section 98(4) of the TNGST Act, 2017. The applicant is registered under the GST Act and possesses a GSTIN no. 33AAACL6155E1ZU. Mis. Shibaura Machine India Private Limited is located at No. 65, (P.O. Box No. 5), Chennai-Bangalore Highway, Chembarambakkam, Poonamallee Taluk, Thiruvallur, Chennai - 600 123. The applicant had submitted application fees of Rs. 5,000 each under subrule (1) of Rule 104 of the CGST Rules, 2017 and the SGST Rules, 2017.

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The applicant runs a business of manufacturing injection moulding machinery and accessories. They further stated that they are now thinking of expanding their business by establishing their new factory adjacent to their already existing factory and incurring capital expenditure towards acquisition in relation to the establishment of this factory. For the purpose of setting up a new factory, the applicant filed a contract with a company named Mis. SMCC Construction India Ltd (Supplier or Vendor) for the construction of its new factory. Perusal of the invoices issued reveals that the above-said construction work falls under SAC 995413 – Design and Construction services of Greenfield Industrial Building Project (Package 1) and attracts GST at 18%. Questions Asked by Applicant: Seeking the present Authority For Advance Ruling (AAR), Tamil Nadu (No. 36/ARA/2025), dated 02.09.2025, the applicant has asked the following questions: "Question 1: Whether the Input Tax Credit (ITC) is eligible on steel reinforcements for the expansion of the factory for manufacturing activity? Question 2: What should be the basis to arrive at the timeline to avail ITC on the tax invoice raised by Supplier to bill the "Advance Component of the Contract and Subsequent Adjustment of Advance in the Service Bills showing both Gross and Net amounts?"

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Answers Given by AAR Tamil Nadu: The authority for advance ruling (AAR) has given the following answers to the questions asked by the applicant: Answer 1: In answer to the first question, the AAR Tamil Nadu said that the applicant can claim input tax credit (ITC) only for the part of the steel structure that is used to support the HVAC machine and the overhead crane movement only. However, this is allowed only if all the conditions mentioned in Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017, and the related explanation, are fulfilled. Answer 2: In answer to the second question, the AAR Tamil Nadu said that the due date to claim ITC (Input Tax Credit) on the tax invoice raised by the Supplier to bill the "Advance Component" of the Contract is already mentioned under the rules of Section 16(4) of the CGST Act, 2017. This section says that the recipient must claim ITC by the earlier of the following two dates: either before November 30 of the next financial year or before filing the annual return for that year, whichever happens first. Refer to the official advance ruling for complete information.