ITC on WCS taken for structure on which machineries are fixed to earth by foundation: AAR Answers

The applicant is engaged in the activity of manufacturing of dyes. The applicant procures intermediate as raw material in crude form which is chemically processed & through HAG machineries ie Hot Air Generation, Liquid raw material is being converted into powder form which is known as dyes i.e. finished product which is applied to textile products.

The applicant intends to set up the factory. For manufacturing Dyes, they require various plant and machinery [for short – ‘P&M’], primary being Sand Mill and spray dyer and HAG machine. These machines are required to be fixed on earth by foundation or various structural supports which are of MS steel/foundation structure.

In view of the foregoing, the applicant has filed this application seeking advance ruling on the below mentioned questions:

Whether the applicant can avail ITC on:

[a] WCS taken for structure on which machineries are fixed to earth by foundation and services taken for setting up plant ie MS steel structure along with roof which has been created mainly to protect machineries being supported by the said foundation.

[b] Steel [TMT bar] being procured by the applicant company and used while taking works contract services for making the said foundation to fix machineries to earth.

Ruling

(a) WCS taken for structure on which machineries are fixed to earth by foundation and services taken for setting up plant i.e. MS steel structure is eligible subject to findings from para 19 onwards. ITC on the structure/shed, erected on the left side of the Sand mill and spray dryer and the ITC on the structure/shed [i.e. roof and its supports] is not eligible. ITC in respect of foundation and support structure in respect of ETP and Transformer is blocked in terms of Section 17(5) of the CGST Act, 2017.

(b) Steel [TMT bar] being procured by the applicant company and used while taking works contract services for making the said foundation to fix machineries to earth is eligible subject to findings recorded in para 19 onwards.

For Official Ruling Download PDF Given Below: